The Tsogo Sun hotel group, which continues to bear the brunt of the Covid-19 pandemic, has warned that its key income metrics will be lower when it reports its financial results on May 27.
Revenue is expected to be between 72% and 76% lower compared to the previous financial year and a loss in adjusted headline earnings per share will be between 47.4 cents and 55.1 cents.
The group which operates the glitzy Palazzo Hotel in Montecasino, the Bantry Bay Resort in Cape Town said earning per share were "impacted by exceptional losses" of R263 million, from R1.1 million in 2020 which relate to fair value losses on the revaluation of the externally-managed investment properties in Hospitality Property Fund, and equipment impairments of a number of hotels in South Africa and offshore.
The majority of the impairments were due to the assessment of the negative impact of Covid-19 on forecast cash flows generated by the underlying hotels for the financial years ending March 2022 and March 2023.
The volatility in the bond market and increased in-country risk assessments that have had a material impact on discount rates across the portfolio, were also some of the contributors, it said.
The group extended a R600 million general banking facility, of which R100 million was utilised at 31 March 2021 and was due to expire in June 2021, to June 2022.
"The lenders to both Tsogo Sun Hotels and the now wholly owned Hospitality Property Fund Limited have been supportive of the group during this challenging period and have approved the covenant waivers for September 2021."
The company's share price dipped to R2.25 in early norming trade, after opening at R2.28.