TPS Eastern Africa, the Serena hotels brands operator, has posted a Sh379.7 million net profit for the year ended December 2022, turning around its fortunes from a Sh639.1million loss incurred the previous year on the backdrop of the Covid-19 pandemic.
The firm’s first profit since the pandemic marks a turnaround for the group whose operations had been constrained by the pandemic-related restrictions, which largely hit the hospitality sector.
“Fortunately, despite the turbulent start to the year 2022 given the Omicron Covid-19 variant outbreak, the second half of the year witnessed reassuring green shoots for improvement in business enquiries across most of the Group’s market segments,” TPS Eastern Africa said Thursday.
The hospitality chain says it marked a recovery from foreign corporate and leisure segments, which supplemented growth in domestic and regional business categories.
The group’s turnover increased by more than twofold as revenue hit Sh6.94 billion from Sh3.29 billion a year before.
TPS Eastern Africa, however, marked an acceleration in unrealised foreign exchange losses, which spiked to Sh312.1 million from Sh41.7 billion in the backdrop of weaker local currencies in the year.
Nevertheless, the forex losses were partly offset by lower finance costs, which dropped to Sh274.5 million from Sh283.3 million.
Similarly, depreciation on the right of use asset and property and equipment cooled off in the period to anchor the recovery in earnings.
TPS Eastern Africa’s contribution to exchequer taxes in its three markets – Kenya, Uganda, and Tanzania, rose to Sh2.2 billion in 2022 from Sh783 million on the back of improved profitability for the group operations.
The company board has expressed cautious optimism on the expected 2023 performance even as it bets on a return to pre-pandemic levels of growth.
“As we look ahead and whilst concerns about the macroeconomic environment persists globally and could weigh on the recovery of global tourism in the months ahead, the Group will hopefully return to pre-pandemic performance levels during the year,” the firm said.
The board has held off paying dividends with plans to invest in product improvements and business recovery.
“The Group will continue to pursue management contracts in strategic locations to further complement Serena’s established regional brand presence and portfolio in Africa,” said TPS Eastern Africa.
