TSOGO SUN POSTS 12% RISE IN PROFITS

Johannesburg – Africa’s biggest hotels and gambling operator, Tsogo Sun, said a recovery in its home market of South Africa in the last three months helped it achieve a 12 percent rise in full-year profit.

The company, which also operates hotels in Nigeria, Kenya and Mozambique, said headline earnings per share (EPS) came in at 196.5 cents in the year to end-March, from 175 cents a year earlier.

Both gambling and accommodation sales grew more than expected in the last quarter of the reporting period, Tsogo Sun Chief Executive Marcel von Aulock told Reuters on Wednesday.

“In hotels I think there is a structural uptick, its in all segments and countrywide,” he said.

And when it comes to gambling, Von Aulock reckons wealthier South Africans have held back on buying big-ticket items, such as new cars and overseas vacations, but kept entertainment spending at usual levels.

The weak state of the South African economy, forecast to by the Reserve Bank to grow at less than 1 percent this year, and many of the commodity-focused countries in which Tsogo operates will keep trading under pressure, the company said in a statement.

Hotel revenue from outside Tsogo’s home market had increased by 25 percent to R691 million ($44.26 million), but had contracted sharply in dollar terms, said Von Aulock.

“They all have some sort of link to commodities and demand was hit by weaker growth and weaker currencies,” he said.

Revenue from hotels in the rest of Africa represents about a quarter of its South African accommodation income.

Headline EPS is the main profit measure in South Africa and strips out certain one-off items.

Source: IOL – Reuters