Mining & Trade News

Malawi Stock Exchange listed Sunbird Tourism plc says restrictions on travel and holding of meetings imposed by the World Health Organization (WHO) due to the outbreak of the novel coronavirus (Covid-19) pandemic has greatly impacted on its business and the entire hospitality industry in the first half of the year 2020.

Sunbird said this in condensed interim financial statements for the half year period ended June 30, 2020 which was signed by its  Chairman Phillip Madinga and Director Anderson Kulugomba.

“The hospitality industry is one of the worst hit industry from the impact of Covid-19 pandemic.”

“The pandemic has had significant adverse impact on the business, affecting all its segments due to worldwide health guidelines and restrictions which resulted in the reduction of travel, both local and international, and the holding of meetings,” reads the statement.

It says the pandemic has influenced the company’s total revenue to decline from a total of MK9.038 billion of last year to MK6.120 billion this year representing 32%.  

The report says in the total revenue, catering division revenue was amounted to MK454 million representing 39%, lower than the revenue achieved for the same period of MK739 million.

It also says the corporate segment, at 68% of total room nights sold, continued to be the anchor segment followed by conference segment at 16%.

The report reads: “These segments are expected to be the key drivers for the business in the short to medium term. The company is implementing various initiatives to grow other segments such as leisure in order to diversify revenue sources.”

It also laments that pre-election political tensions created bottle necks in the company’s revenue sources following reduction in the activities by customers due to cautions of travelling during the first half of the year.

Meanwhile, the company’s operating costs on administration and other expenses totaled MK5.8 billion, 3.4% higher than same period last year, which is favorable compared with inflation trends.

Finance costs totaled MK289 million which was 181% above last year’s MK103 million, driven by capitalization of completed projects from prior year.

The company also registered loss after tax of MK1.336 billion compared unfavorably to the profit of MK1.197 achieved in the same period in the year 2019.

Subbird projects continued global recession due to the pandemic negatively affecting the hospitality industry.

However, the firm is optimistic for a gradual improvement to the sector following easing of lockdowns in various countries and reopening of borders and airports.

Sunbird says the recovery process will be complemented by the new government’s transformation agenda premised on the three key themes of inclusive and sustainable growth, macroeconomic stability and sound financial management.

Reads the statement: “There are a number of key product improvement plans that have been implemented across the company and some that are currently underway.”

“Construction of a new 42-bedroom beach resort at Sunbird Livingstonia Beach is at an advanced stage and expected to be opened later in the year, while construction of additional 15 rooms at Sunbird Nkopola Lodge is in the final stages and it is expected to be completed in the third quarter of the year,” says the company. It says the Board’s focus remains to continue building a resilient brand by improving service delivery and guest experience through product and infrastructure improvements and intensifying sales and marketing activities to ensure that the group maintains its market leadership in the hospitality industry.

Leave a Comment

Comments