HomeBusinessRTG narrows loss margin to $290 451

RTG narrows loss margin to $290 451

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RAINBOW Tourism Group (RTG) has narrowed its loss margin to $290 451 for the half year ending June from $2,8 million posted last year due to improved performance.

BY TARISAI MANDIZHA

In the period under review, revenue grew by 2% to $11,6 million from $11,4 million in 2016, while loss after tax was reduced by 90% to $300 000 from $2,9 million in 2016.

Addressing journalists in Harare yesterday, RTG chief executive officer, Tendai Madziwanyika said the positive trajectory for the six months of 2017 had positioned the company to register a turnaround from the loss record in full year 2016.

“We have stabilised the business at last. It has sort of taken us five years and if you recall the last briefing, we talked about having achieved turnaround and that the company is now ready to grow. I think that the first six months’ results will show that the business has actually stabilised.

“We have been working tirelessly to restructure the balance sheet. We were hoping to complete the transaction, but we did not quite finish we are very close to finishing, but we believe by end of this year that transaction will be done,” he said.

Madziwanyika, however, did not disclose details of how the balance sheet will be restructured.

“If we are able to put closure to it by end of the year, what I promise we would have achieved, a complete turnaround of RTG in five years,” he said.

Madziwanyika said the group was targeting to achieve a double digit growth by year end and foreign business is expected to close the year at over $8 million and e-commerce to reach $1,2 million by year end.

“The company recorded a 2% growth in revenue from $11,4 million in 2016 to $11,6 million in 2017. The growth can be attributed to the strong performance registered across all hotels except for the company’s Harare hotels,” he said.

“The performance, excluding the Harare hotels, was a growth of 13% from $6,3 million to $7,1 million in 2017. The performance of the Harare hotels is recovering following social media attacks in 2016.

A notable growth was recorded in RTG’s Victoria Falls Hotel, which posted a $339 000 growth in revenues compared to the same period in 2016. This reflects the huge growth potential the region acquired as a result of increased flight seats in Victoria Falls following the opening of the Victoria Falls International Airport in 2016.”

In the period under review, revenues from foreign guests continued on an upward trajectory with a 9% growth to $3,8 million from $3,5 million in 2016 driven by a major boost from the e-commerce business, which grew by 46% to $562 000 in 2017 from $386 000 in 2016.

Uptake of rooms for the period under review remained unchanged at 85 000 compared to the same period in 2016, while revenue per available room remained $36.

Earnings before interest, tax, depreciation and amortisation margin for the period under review closed at 9% ($1,1 million) compared to 10% $ 1,2 million recorded during same period prior year.

During the period under review, interest bearing loans for the period decreased by 10% to $14,9 from $16,5 million as at December 2016. The company’s net borrowings cost closed the half year at 7% per annum down from 10% in 2016.

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