Connect with us
Advertisement

US dollar bed night rates anchored Chobe to glory

Just before COVID-19 intensified around February this year, a development that put the tourism industry into a standstill, Chobe Holdings, a Botswana Stock Exchange listed tourism & hospitality entity, was counting its blessings delivered during the larger part of 2019 and readying for a promising 2020.

Transactions in US dollar terms did the trick for one of the oldest companies on the BSE bourse. The company, which operates lucrative hotels, safari and camping sites along the mighty Chobe River realized a 10% increase in revenue for its financial year ended 29 February 2020. This, according to Chobe s condensed audited financials for the period, is attributable by in large to better achieved bed night rates in US Dollar terms and depreciation of the Pula against the US Dollar. Overall, foreign exchange gains delivered solid operating income.

During the year Chobe registered a slight increase in operating cost at 3%, compared to a larger hike in the prior year, something which company Directors attribute to fruitful cost containment strategies delivered by management. During the period, occupancy remained fairly flat when compared to the same period in the prior year ended February2019 – this was due to increased competition.

Chobe Chief Executive Officer and Chairman, J M Gibson suggests that the other contributing factor to flat occupancy output was negative press around the lifting of the hunting suspension. However on a positive note, cost were contained at inflationary levels, resulting in solid operating profits and offsetting flat occupancy output to deliver impressive Profit after tax, up 19 % when gauged against the prior year ended February 2019.

During the financial year under review Chobe spent P45.9 million, from internally generated cash flows on the purchase of game drive vehicles, a Cessna Caravan as well as significantly improving existing buildings and equipment. As previously reported, the Company, through its wholly owned subsidiary Ker & Downey (Botswana) Proprietary Limited, acquired the entire issued stated capital of Nelie Investments Proprietary Limited, a property owning company holding leases for two game farms in the Hainaveld area for a cash consideration of P15.4 million financed using the Groups internal cash resources.

Company executives say the two properties will be utilized to increase the extent of the land holdings currently held by the Dinaka Conservancy. Desert & Delta Safaris Proprietary Limited, a wholly owned subsidiary of the Company, acquired the entire shareholding and loans in Quadrum Proprietary Limited and Sedia Hotel Proprietary Limited with effect from 1st August 2019 for a total consideration of P30 million. The entities own the land lease and operate Sedia Riverside Hotel, a 31-room hotel in Maun.

Furthermore P25m, financed from internally generated cash resources, was paid on the effective date with the balance payable on the anniversary of the effective date for the following five years in equal installments of P1m each or the fulfillment of certain conditions.

During the financial year ended 29 February 2019 Chobe adopted IFRS16 Leases for the first time in compliance with International Financial Reporting Standards. This has resulted in significant increases in Depreciation, Finance cost, and recognition of Right of Use Assets and Lease Liability due to all of the Groups camps and lodges being on leased lands. The adoption of this standard has also resulted in Deferred Lease Obligation being reduced to zero.

A total of P1.8 million was disbursed to employees during the year ended 29th February 2020 as part o the phantom share scheme approved during the year ended 28th February 2013 which allows the Groups employees to participate in the dividend distributions of the Group. The scheme allows all qualifying staff to share equally in a bonus which is calculated to be equal to the value of dividends attaching to three million shares in the Company.

Regarding the ongoing crisis of COVID-19, the pandemic has caused a 22% fall in international tourist arrivals during the first quarter of 2020 with experts saying this could lead to an annual decline of between 60% and 80% when compared with 2019 figures. It is anticipated that signs of recovery will start emerging in the last quarter of 2020 but mostly in 2021 with leisure tourism expected to recover quickly. The recovery is however dependent on containment of the virus, easing of travel restrictions and reopening of borders.

Chobe Holdings Limited says on their part the marketing push of dont cancel, defer has been largely successful with more than 70% of the confirmed bookings that were scheduled to travel in the period April June 2020 deferring their travel to 2021. We are therefore confident of a fairly quick recovery when it is deemed safe for international travel to resume, said the Chobe CEO.

J M Gibson said during the last couple of years the company has spent considerable cash resources to upgrade its aircraft, motor vehicles, boats, other equipment, buildings and other operating assets. All our assets are secure and require minimal expense to keep them ready to perform, policies and procedures are in place to ensure there is no adverse deterioration of assets during the lockdown, he said.

Continue Reading

Business

China’s GDP expands 3% in 2022 despite various pressures

2nd February 2023
China’s Gross Domestic Product (GDP) expanded by 3% year-on-year to 121.02 trillion yuan ($17.93 trillion) in 2022 despite being mired in various growth pressures, according to data from the National Bureau Statistics.

The annual growth rate beat a median economist forecast of 2.8% as polled by Reuters. The country’s fourth-quarter GDP growth of 2.9% also surpassed expectations for a 1.8% increase.

In 2022, the Chinese economy encountered more difficulties and challenges than was expected amid a complex domestic and international situation. However, NBS said economic growth stabilized after various measures were taken to shore up growth.

Industrial output rose 3.6% in 2022 over the previous year, while retail sales slightly shrank by 0.2% data show that fixed-asset investment increased 5.1% over 2021, with a 9.1% hike in manufacturing investment but a 10% fall in property investment.

China created 12.06 million new jobs in urban regions throughout the year, surpassing its annual target of 11 million, and officials have stressed the importance of continuing an employment-first policy in 2023.

Meanwhile, China tourism market is a step closer to robust recovery. Tourism operators are in high spirits because the market saw a good chance of a robust recovery during the Spring Festival holiday amid relaxed COVID-19 travel policies.

On January 27, the last day of the seven-day break, the Ministry of Culture and Tourism published an encouraging performance report of the tourism market. It said that domestic destinations and attractions received 308 million visits, up 23.1% year-on-year. The number is roughly 88.6% of that in 2019, they year before the pandemic hit.

According to the report, tourism-related revenue generated during the seven-day period was about 375.8 billion yuan ($55.41 billion), a year-on-year rise of 30%. The revenue was about 73% of that in 2019, the Ministry said.

Continue Reading

Business

Jewellery manufacturing plant to create over 100 jobs

30th January 2023

The state of the art jewellery manufacturing plant that has been set up by international diamond and cutting company, KGK Diamonds Botswana will create over 100 jobs, of which 89 percent will be localized.

This content is locked

Login To Unlock The Content!

Continue Reading

Business

Investors inject capital into Tsodilo Resources Company

25th January 2023

Local diamond and metal exploration company Tsodilo Resources Limited has negotiated a non-brokered private placement of 2,200, 914 units of the company at a price per unit of 0.20 US Dollars, which will provide gross proceeds to the company in the amount of C$440, 188. 20.

According to a statement from the group, proceeds from the private placement will be used for the betterment of the Xaudum iron formation project in Botswana and general corporate purposes.

The statement says every unit of the company will consist of a common share in the capital of the company and one Common Share purchase warrant of the company.

Each warrant will enable a holder to make a single purchase for the period of 24 months at an amount of $0.20. As per regularity requirements, the group indicates that the common shares and warrants will be subject to a four month plus a day hold period from date of closure.

Tsodilo is exempt from the formal valuation and minority shareholder approval requirements. This is for the reason that the fair market value of the private placement, insofar as it involves the director, is not more than 25% of the company’s market capitalization.

Tsodilo Resources Limited is an international diamond and metals exploration company engaged in the search for economic diamond and metal deposits at its Bosoto Limited and Gcwihaba Resources projects in Botswana.  The company has a 100% stake in Bosoto which holds the BK16 kimberlite project in the Orapa Kimberlite Field (OKF) in Botswana.

Continue Reading