Serena hotels operator posts Sh274m net profit

TPS Eastern Africa, the operator of Serena brand of hotels, posted a 39.2 per cent profit decline in the year ended December driven by lower sales and higher expenses.

It made a net profit of Sh274.4 million in the period compared to Sh451 million the year before. The company has declared a dividend of Sh1.35, same as for the previous year.

“It will be noted that, despite challenging business conditions, the company proposes to maintain the same level of dividend payment in line with the previous year,” TPS said in a statement.

The performance came as sales declined seven per cent to Sh6.3 billion in what the firm attributed to several problems facing the tourism industry.

TPS said a series of travel advisories, terrorist attacks and the introduction of value added tax on tourism services have continued to “make destination Kenya uncompetitive relative to the other safari destinations.”

READ: Serena hit by slump in tourism, records profit drop

Other negative factors are the Ebola outbreak that has hurt African tourist destinations in general, the company said. Its share price has dropped 11.4 per cent over the past six months to trade at Sh34.7.

Kenya’s beach tourism has been particularly hurt by rising insecurity in the country, with the low business seen spilling over to this year.

“The Kenyan Coast is experiencing an unprecedented business crisis and unfortunately, most of the setbacks continue to negatively impact foreign leisure business levels in 2015,” TPS said.

The terrorist attacks and travel advisories from key source markets like Europe have seen the cancellation of charter flights to Kenya, significantly hurting leisure tourism.

TPS said it will this year begin extension and refurbishment projects at Nairobi Serena Hotel, Kampala Serena Hotel, and Dar es Salaam Serena Hotel.