HARARE, May 3 (The Source) – The Rainbow Tourism Group (RTG) on Wednesday said its after-tax loss for the full year to December widened to $4,7 million from $29,304 recorded in the prior year, mainly on the back of lost revenues and retrenchment costs.
Revenue declined by 11 percent to $24 million in the period from $26,9 million reported in the previous year.
Chairman John Chikura said the company lost lost $800,000 in revenue due to direct cancellation of confirmed bookings.
The company also incurred $600,000 from a retrenchment exercise which the company completed in the fourth quarter.
During the year the company exited Rainbow Beitbridge Hotel and Rainbow Hotel Mozambique operations due to their perennial poor performance. The discontinued operations recorded a loss of $1,6 million, representing 34 percent of the total loss for the year.
However, foreign revenue increased by 20 percent from $6,7 million in the previous year to $8,1 million.
“In view of the subdued domestic market performance, the company aims to attain a 40 percent contribution in foreign revenues going forward. This will be achieved through increased sales and marketing investment in international source markets,” said Chikura.
The company adopted a high volume-low rate strategy in the domestic market to protect its market share and sustain revenue streams.
Revenue per available room (RevPAR) fell 12 percent from $41 in the previous year to $36 on the back of high volume-low rate strategy implemented by the company.
Earnings before interest, tax, depreciation and amortisation (EBITDA) decreased by 88,3 percent to $426,653 in the period compared to $3,6 million recorded in the previous year, mirroring the decline in revenue.
Chikura said NSSA won legal proceedings against RTG to recover its $10 million loan extended to the company which was due in December 2015, adding that the pension fund is, however, yet to execute the judgement as it allows the company to focus on alternative ways of restructuring the debt.
Total assets declined by 6,3 percent to $46,7 million from $49,8 million in the previous year.
The company reduced its debt by 11 percent from $19 million in the prior year to $17 million.
Chikura said the opening of the new Victoria Falls International airport is expected to spur revenue going forward.