By Alois Vinga
LEADING hotelier, African Sun Limited (ASL) has commenced the integration of Dawn Properties Limited (DPL) following the recent acquisition of the entity’s controlling stake.
Last year the acquisition of the entire issued ordinary shares of DPL was approved for an issuance of the African Sun Limited ordinary shares listed on the Zimbabwe Stock Exchange (ZSE).
The transaction was achieved through an issuance of one ASL ordinary share for every 3,988075746 Dawn ordinary shares held.
In a recent update, ASL chairperson, Alex Makamure said the hotelier has commenced the process of integrating the property concern.
“I am pleased to advise that pursuant to the Company’s offer to acquire 100% of DPL’s ordinary shares as of 20 January 2021. The company is going through pertinent legal processes to acquire the remaining 8.83%. We are in the process of integrating the business to achieve the anticipated synergies,” he said.
The deal is understood to have the potential to strategically position the hotel group and bolster its competitiveness.
Meanwhile, in the financial year ended December 31 2020, the ASL group recorded a low occupancy of 23%, representing a decline of 25 percentage points compared to 48% recorded in 2019.
Resultantly, there was a significant drop in the group’s inflation adjusted revenue by 55% to $1,84 billion compared to $4,10 billion in the same period last year.
Room nights sold went down by 52% to 137,162 from 288,224 reported last year.
The decline in room nights was across all market segments, with those attributable to export and domestic reducing by 82% and 35% respectively.
“The decrease in revenue and volumes resulted in the group posting an inflation adjusted of $5,42 million compared to $1,74 billion that was achieved in 2019.
The inflation adjusted loss before tax of $1,86 billion is largely a result of the monetary loss of $1,50 billion, which is a result of applying International Accounting Standard (IAS) 29 Financial Reporting in Hyperinflationary Economies.
The inflation adjusted financial numbers are the primary results, while the historical financials have been provided as supplementary information.
“Covid-19 represents the most significant challenge that our industry has ever faced. At the onset of Covid-19 induced lockdowns, we moved swiftly to right-size our business in response to the precipitous decline in revenue by re-basing our cost structure,” Makamure added.