Companies

Serena hotel operator TPS narrows loss to Sh633m

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Guests enjoy a Serene environment at Serena Beach Hotel in Mombasa. FILE PHOTO | NMG

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Summary

  • The company received waivers from its lenders, a move that helped ease pressure on its financial position.
  • TPS’s long-term borrowings increased to Sh5.5 billion from Sh4.9 billion, partly a reflection of the deferred interest expenses.
  • The company had earlier said it was in talks to extend or restructure credit facilities from Absa Bank Kenya and Proparco besides receiving financial support from its majority shareholder Aga Khan Fund for Economic Development, SA.

Serena hotel brand operator TPS Eastern Africa #ticker:TPSE nearly halved its net loss to Sh632.9 million in the year ended December as sales increased with the receding Covid-19 pandemic.

The Nairobi Securities Exchange #ticker:NSE -listed firm had made a net loss of Sh1.2 billion a year earlier when the hospitality industry suffered the most from bookings cancellations and travel restrictions as the respiratory disease unfolded.

The company’s sales rose 61.6 percent to Sh3.2 billion from Sh2 billion.

“Due to the global distribution of vaccines, travel restrictions and curfews eased from the third quarter of 2021 as Covid-19 related fatalities reduced remarkably,” the company said in a statement.

“Thus, as the world was headed towards an uneven recovery, the group was required to demonstrate agility in response to the rapidly changing circumstances on various fronts of the business.”

TPS’ cash position improved to Sh93.2 million from a negative Sh133.5 million. The company received waivers from its lenders, a move that helped ease pressure on its financial position.

“Through the vital support from our senior lenders, the group managed to defer debt repayments in order to support operations under the exceptionally difficult circumstances,” the company said.

French development fund Proparco is among the institutions that have financed the hotel operator. TPS’s long-term borrowings increased to Sh5.5 billion from Sh4.9 billion, partly a reflection of the deferred interest expenses.

The company had earlier said it was in talks to extend or restructure credit facilities from Absa Bank Kenya #ticker:ABSA and Proparco besides receiving financial support from its majority shareholder Aga Khan Fund for Economic Development, SA.

TPS says it will implement essential property maintenance across the Serena portfolio. It added that it will be ready to resume expansion this year going forward by actively pursuing management contracts in strategic locations.

The firm said the business environment remains fluid on the negative effects of the Russia-Ukraine conflict.

“Energy and commodity prices have surged, adding to inflationary pressures from supply chain disruptions caused by the Covid-19 pandemic,” TPS said.

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