JOHANNESBURG (Reuters) -South African hotel-owner Southern Sun reported on Wednesday an 88% jump in full-year profit, benefiting from cost-saving initiatives, tourism and business travel and events.
Southern Sun, formerly Tsogo Sun Hotels, said its adjusted headline earnings per share (AHEPS), the main profit measure in South Africa, grew to 56.4 cents in the year ended on March 31, up from 30 cents a year ago.
Southern Sun, which has 95 hotels and resorts in Africa and the Middle East, said it was a record year for profitability, with total income growth of 19% and earnings before interest, income tax, depreciation, amortisation, rent, long term incentives and exceptional items (EBITDAR) up 32% to 1.9 billion rand ($105 million).
Group revenue grew by 19% to 6 billion rand.
The owner of Southern Sun branded hotels and luxury Beverly Hills hotel, said its performance was anchored by the “strict” maintenance of cost efficiencies achieved through the complete restructuring of the group during the COVID-19 period. The group cut jobs and slashed salaries, among other measures.
It also benefited from its significant exposure to the Western Cape province, particularly Cape Town. It generated revenue of 1.9 billion rand from the region.
“Cape Town has benefited from foreign inbound travel and large-scale conferences and events across all segments, which boosts demand for accommodation and drives both volume and rate growth in the region,” the company said.
Its luxury hotel guests have proven more resilient to economic pressures such as inflation and rising interest rates, “being influenced more by location and personal preference rather than price,” it added.
($1 = 18.1050 rand)
(Reporting by Sfundo Parakozov; Editing by Tom Hogue, Elaine Hardcastle)
