Wilderness Safaris hits 69% profit

SHARE   |   Sunday, 02 November 2014   |   By Kabelo Adamson

• Boosted by stronger US D currency

• Occupancy up from 67 to 73% 

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• Concerned with Ebola effects 

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Wilderness Holdings has recorded a double digit profit after tax to reach P82 million – whopping 69 percent increase from the previous period.

The results released this week, which are for the six-month period ending 31 August 2014, show that the group performed well as revenue grew by 13 percent to reach P880 million.

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In the statement accompanying the financial results, Wilderness Chief Financial Officer, Ami Azoulay attributed the growth to various factors, including improved occupancy rate assisted by the stronger US Dollar currency.

Wilderness Safaris, which has operations in nine African countries with more than 60 safari camps, has disclosed that owned bednights sales increased by 17 percent while available bed nights rose by seven percent which is lined to the addition two camps. As a result of two additional camps, occupancy rate increased from 67 percent to 73 percent.

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“Reduced discounting and an increase in bednight rates resulted in an increase of nine percent in revenue per available room,” explained Azoulay.

He further explained that the average rate for the group reporting currency, which is Botswana Pula was six percent weaker against the US Dollar at P0.81, which ultimately had an effect on increasing the recorded revenue.

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On the other hand, the South African Rand depreciated against the Botswana Pula by six percent to R1.20 on translation of the South African and Namibian operations. Gross margin of Wilderness has improved by one percent from 42 percent to 43 percent as the higher yielding owned product contributed 59 percent of revenue.

Azoulay said this is a result of a 17 percent year-on-year increase in owned product sales compared to an eight percent growth in independent product sales.

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“The improved mix has the effect of increasing margins. However the decision taken to invest in further improving the quality of the food and service at all our camps has increased variable costs per bednight,” he said.

Wilderness Safaris earnings before interest taxes, depreciation and amortisation (EBITDA) margin has improved from 14 percent to 16 percent with all geographic segments  reported to have recorded an improved performance.

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Azoulay added that operating costs in the local currency are showing an increase of only six percent, which is partly explained by the translation of costs to Botswana Pula as the South African and Namibian operations recorded a nine percent increase in local currency terms.

“Excluding the effects of disposed businesses and additional camps, like-for-like costs were well controlled and increased by an acceptable seven percent,” Azoulay said, further explaining that the result is satisfactory considering fuel costs were up 10 percent.

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The group also made other gains amounting to P5.1 million, which include profit from insurance claims which totalled P3.9 million and P1 million made as a profit from the sale of two subsidiary companies.

During the period under review, impairment losses amounted to P5.2 million of which P3 million related to impairment of camp assets as negotiations of new lease are on-going. The other P1.8 million of the total impairment is attributed to surrender of a concession in Zambia while the balance is related to various property, plant and equipment.

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Going forward, the group says it expects demand from the US to increase in the second half of the year, but however remains cautions that if the Ebola outbreak in West Africa persists, it is likely to have an impact on the group and tourism as whole.

Equally a source of concern to Wilderness Safaris is the potential introduction of the new visa requirements for travellers to South Africa; nonetheless the group view both developments as short term challenges and are likely not to have impact in the medium and long term.

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For the six month period, Wilderness Safaris board of directors have not declared dividends to shareholders in line with the group’s policy of paying dividends based on full year results.



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