The group reported an operating profit of US$1.2 m compared with a loss of US$40 000 last year, but this was all but wiped out by interest. The bottom line profit of US$1,049 m from US$112 000 was boosted by a tax credit.
Finance director, Paschal Changunda, said the cost of borrowing on short term money had been reduced to 23% from 36% and had since come down to 17.7%. Long-term funds were on 7% from 14% and the effective combined cost was 15,3% compared with 21,1%.
The recent reduction in short-term borrowings had reduced the effective rate to 12,3% and if RTG were able to get more funds in 180-365 days at around 15%, the effective rate would come down to 11%.
Changunda said US$5,133 million was trapped in ReNaissance Merchant Bank for the Rainbow Towers refurbishment, but they had been in talks with Afreximbank and were confident they would get the money shortly.
He repeated the reason given at the AGM as to why RMB had been used as the conduit for the funds – it was one of the banks approved by the Cairo-based bank. Mtasa said as a result of the delay in the release of the funds, the refurbishment of floors 11-16 would only be complete in December.
Changunda noted that city hotels continued to carry the day, contributing 74% of revenue (unchanged on 2010), and the lion’s share of the profit with Resorts and Lodges dragging on the performance.
The revenue contribution from the Region doubled to 12%, while the Touring/Safari business had been put up for sale (as flagged at the AGM), and was expected to fetch around $2 mln.
In the period under review, RTG achieved 42% occupancy in Zimbabwe compared with 40% last year, a figure which was 7% above the national average. International arrivals comprised 14% of all visitors to Zimbabwe.
Post published in: Business