Chobe bullish on tourism prospects
Staff Writer | Tuesday June 3, 2014 10:35
In a statement accompanying the company’s financial results for the year ended February 2014, the tourism company stated that when compared to the previous year, they have seen an increase in revenue for the group will be achieved in the forthcoming financial year.
“The company will also continue to invest in modernising its aircraft fleet which will enable the group to deliver the ‘high standards expected by its clientele while significantly reducing maintenance costs associated with older aircraft’.
“Synergies in marketing, operating and administrative structures following the acquisition of Moremi Safaris are anticipated to be realised during the forthcoming financial year,” read the statement.
Last August, Desert and Delta Safaris, a subsidiary of the Chobe acquired a 100 percent interest in Moremi Safaris, owners and operators of Camp Xakanaxa, a 24-bed lodge in the Moremi Game Reserve.
According to Chobe, P36.8 million of the purchase price was paid to the vendors in August 2013 from internally generated cashflows. In terms of the sale agreement the balance of P1 million is payable to the vendors on 31st July 2014.
“The post-acquisition financial performance of Moremi Safaris has fully justified the acquisition. The annual impairment tests of this business has also borne out this fact, with significant ‘headroom’ between the calculated ‘value in use’ of this cash generating unit and the carrying value of its net assets,” read the statement.
During the period under review bednights sold increased from 42,117 in prior year to 45,944. Camp Xakanaxa contributed 2,264 bednights post-acquisition.
Revenues rose by 19 percent due to a significant increase in bednights sold in peak season, an increase in achieved bed rates in US Dollar terms, the weakening of the Pula against the US Dollar and increased capacity following the addition of Camp Xakanaxa.
In the period the company realised an operating cost increase of 24 percent which it considers satisfactory in light of increased volume of business, current inflation levels and the impact of expensing future lease rentals amounting to P2.3 million.
During the financial year, the company sold, on suspensive terms, its 44 percent interest in Namibian Associate, Lianshulu Lodge although the buyers have defaulted on the current year’s payment of N$880,000.
“The investment in this associate was fully written down in previous financial years and therefore no further financial impact is anticipated following this default. Legal action is currently being taken to secure payment in terms of the sale agreement,” added Chobe
The group spent P15.6 million, financed from internally generated cashflows, on significantly improving existing equipment, buildings, as well as the purchase of additional equipment and new aircraft.