RAINBOW Tourism Group posted an operating loss of $309,219 for half year to June from a positive out turn of $29,049 during the same period last year as borrowing costs ate into a two percent growth in revenue to $13,5million.
Gross profit margins narrowed to 65,9 percent from 66.5 percent in prior year and finance charges surged 15 percent to $978,362 as total borrowings increased 11 percent to $23,5million.
Profit after tax for the year, though increased by 32 percent to $139,000 as the group benefited from a tax credit of $448,429.
Chief executive Tendai Madziwanyika attributed the growth in revenue to a 43 percent growth in arrivals from Europe.
RTG spent $830,000 in retrenchment costs after it laid off 68 employees in August.
Earnings Before Interest Tax Depreciation and Amortisation margin also was low compared to the prior year due to the high start costs of the Rainbow Beitbridge Hotel which was opened recently.
“The drop to EBTIDA was mainly due to newly opened Rainbow Beitbridge Hotel which posted a negative EBTIDA of $350,000 as a result of start-ups costs and low revenues,” said Madziwanyika.
RTG also managed to reduce its debt from $23,9million of 2013 to 23,5million and it also retrenched 68 members at a cost of $200,000.Advertisement