Cresta suffers P63m loss due to COVID-19
Pauline Dikuelo | Friday June 11, 2021 14:58
Previously the group recorded a profit of P24 million in the corresponding period, meaning the year-on-year drop was minus 367%.
Commenting on the group’s financials for the year ended December 31, 2020, the chairperson, Moatlhodi Lekaukau said the disruptions are expected to continue in varying degrees for the foreseeable future.
“It is not clear when the current operating restrictions will return to ‘normal’ pre-pandemic levels,” the chairman said.
Lekaukau revealed that following the first lockdown last year, the group temporarily closed its hotels for normal operations from April 1 to June 4, 2020. The group kept three of its hotels operating as quarantine centres offering services to the Ministry of Health and Wellness on a cost-recovery basis until November 27, 2020. He said Cresta Golfview in Zambia was also closed due to a significant decline in occupancies, from April 1 to May 31, 2020.
“In Botswana, the local market was the only available business for eight months, between April 1 and December 1, 2020, due to the closure of borders to non-citizens and non-residents,” he said.
Meanwhile, Cresta Marakanelo managing director, Mokwena Morulane said the group is currently in negotiations for an additional working capital facility to provide additional headroom or the cash available for drawdown. He said to date the group has had adequate resources to meet its loan repayment commitments and its trading liabilities as they fall due.
“The directors are satisfied that the company has sufficient liquidity to withstand adjustments to the base case forecast, as well as the downside scenarios and continue to trade as a going concern for a period of at least 12 months from the date of approval of these financial statements and accordingly, the financial statements have been prepared on a going concern basis,” he added.
During the reporting period, Morulane said the Government of Botswana was supportive of the tourism and hospitality industry through its COVID-19 financial relief measures, granting a wage subsidy over nine months to qualifying businesses.
“The group was a beneficiary of the wage subsidy and was eligible to receive a total of P14.6 million for the nine-month period. The wage subsidy was fundamental in helping the group to keep the majority of its employees on full salaries during the period of hotel closures and low levels of business activity,” he said.
Cresta Marakanelo is the country’s largest hotel group and its ability to survive the pandemic’s impact on the tourism sector has been read as an indicator of the industry’s overall health.