TPS Eastern Africa Plc, the operator of the Serena hotels brand, is optimistic about improved performance in the second half of the current financial year, despite incurring net losses in the six months ended June 30, 2025.
The listed hospitality firm reported a net loss of Sh15.9 million for the six months, compared to a profit of Sh695.95 million last year. The dip followed the reversal of a Sh762 million unrealised forex gain in June last year to a Sh17 million currency loss this year owing to a stable shilling that has held at Sh129 to the dollar since the start of the year.
The TPS Eastern Africa management is, however, upbeat about a performance turnaround in the second half of the year, citing the peak tourism season.
“Given the seasonal nature of the tourism industry in East Africa and the uncertainties surrounding regional and global macroeconomic conditions, the first-half 2025 results should not be viewed as indicative of the group’s full-year performance,” it said. “Looking ahead, management remains cautiously optimistic for the second half of the year, which traditionally represents the peak season.”
The firm said a decline in foreign exchange gains recorded in the first half of 2024 hurt its performance.
“The prior year’s finance income was enhanced by non-cash unrealised exchange gains from the appreciation of the Kenyan shilling against the US dollar. The first half of 2025 was characterised by relative exchange rate stability, which, while beneficial for operational predictability, eliminated the exceptional currency gains that were recorded in the first half of 2024,” said the company.
“Consequently, the group recorded a net loss after tax of Sh16 million compared to a profit of Sh696 million in the corresponding period last year,” it added.
The firm's revenues dropped 11 percent to Sh4 billion, which management attributed to public protests witnessed across the country in the first half of the year and lower margins arising from inflationary pressures.
The group kept a lid on its expenses with inventory used in its 33 hotels spread in 8 countries, declining 10.6 percent to Sh1.1 billion, while other operating expenses shrank 7.3 percent to Sh984 million.
TPS disclosed that Serena Hotels generated a positive operating cash flow of Sh600 million in the first six months of the year, which saw it spend Sh500 million to refurbish and upgrade some of its hotels.
Management is hopeful of an improved second half of the year, riding on increased tourist traffic driven by the wildebeest migration and the African Nations Championship (CHAN) football tournament being hosted in Kenya, Tanzania, and Uganda.
TPS has a presence in the three countries hosting the 19-team tournament.
TPS owns and operates a collection of 33 upmarket properties, including hotels, resorts, safari lodges, camps, palaces, and forts in the Eastern African countries of Kenya, Tanzania, Zanzibar, Uganda, Rwanda, Mozambique, and the Democratic Republic of Congo.
TPS is seeking to protect itself from foreign currency volatilities by holding dollars paid by its customers to repay its dollar-denominated debts.
“The group's US dollar-denominated revenues continue fully to cover the US dollar-denominated obligations maturing in 2025 and beyond,” said TPS.
