Tsogo Sun is expecting an annual loss on Covid-19 knock

Durban – Tsogo Sun Hotels yesterday said it expects to fall into a full-year loss, hurt by reduced trading volumes as a result of the Covid-19 outbreak in its operations.

Tsogo Sun operates a portfolio of more than 100 hotels in South Africa, Africa, Seychelles and the Middle East.

In a trading update for the year to end March, the group said it was likely to report a headline loss of between 57.4 cents a share and 66.7 cents, reversing earnings per share (Heps) of 20.4 cents reported a year earlier.

However, it expected its loss a share to reflect an improvement of between 8% and 20%, to be between 67.6 cents and 77.7 cents, improving on last year’s loss of 84.5 cents.

The expected improvement in a loss a share is a result in lower impairment charges in the current year compared to a year earlier.

The group has been impacted by exceptional losses of R263 million net of tax, and non-controlling interests, the majority of which related to fair value losses on the revaluation of the externally managed investment properties in Hospitality Property Fund, property, plant and equipment impairments of a number of hotels in South Africa and offshore as well as impairments of offshore investments.

In last year’s result, the group reported impairment charges of R1.17 billion.

“The majority of the quantum of these impairments are due to management’s assessment of the negative impact of Covid-19 on forecast cash flows generated by the underlying hotels for the financial years to end March 2022 and March 2023, as well as the volatility in the bond market and increased in-county risk assessments that have had a material impact on discount rates across the portfolio,” said the group.

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