TPS says a number of positives developments, including the tourism sector’s positive turnaround during the second half of the 2016 helped grow its full-year revenues by 4.5 per cent to Sh6.5 billion.
The hotel group also benefited from exchange gains of Sh51.6 million on foreign currency denominated loans.
TPS East Africa #ticker:TPS, the parent firm of the Serena group of hotels, has rebound to profitability by posting a net profit of Sh129.3 million for the year to December on higher revenues.
The NSE #ticker:NSE -listed company, which owns and operates hotel and lodge facilities in East Africa, posted a net loss of Sh280.6 million in 2015 when its business was adversely affected by travel advisories in key Western market.
TPS says a number of positives developments, including the tourism sector’s “slow but positive turnaround during the second half of the 2016”, helped grow its full-year revenues by 4.5 per cent to Sh6.5 billion.
The hotel group also benefited from exchange gains of Sh51.6 million on foreign currency denominated loans compared to losses of Sh121.6 million recorded last year.
“A number of occurred in 2016 which augured well with the Group’s business including the serious attention being paid to security issues in Kenya and the rest of the East African region,” TPS said in a statement Thursday.
“There was also a slow but positive impact of the series of incentives provided by the Kenyan government in 2016 to revive and make destination Kenya competitive relative to other safari destinations,” it added.
Kenya’s security sentiment has improved significantly with the capital city hosting major global events on trade and investment and hosting key global figures such as former US president Barrack Obama.
As a result of these interventions, TPS says traditional and new market sources performed slightly better than 2015 complementing better earnings from the East African corporate sector and domestic leisure market segment.
Growing costs
The hotel chain’s management says it remains concerned about the business’ increasing operating and maintenance costs as well as the subdued global economic and business conditions caused by Brexit and the US elections.
TPS last year commenced the refurbishment of Nairobi Serena Hotel and the extension of the Kampala Serena Hotel looking to reposition its units and increase its market share in future.
This refurbishment, which is being done in phases, is as a result of a $20 million loan that TPS received from French fund Proparco two years ago to renovate and expand its properties.
The hotel chain’s board of directors has recommended payment of a first and final dividend of 35 cents per ordinary share held, compared to the previous year’s 25 cents per share.
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