TPS Eastern Africa, the operator of Serena Hotels, has warned that full-year profit will fall by more than 25% after last year’s earnings were inflated by large non-cash foreign-exchange gains that will not recur, and as weaker regional security and travel advisories slow bookings across its East African portfolio.
- •The warning follows a sharp reversal in performance seen through the first half of 2025 when TPS slipped into a KSh 16 million net loss in the six months to June, compared to a KSh 696 million profit a year earlier.
- •The group’s revenue dropped 11% to KSh 4.05 billion as public demonstrations in Kenya, inflation pressure and geopolitical risks pushed down occupancy levels and margins.
- •Profit before depreciation, finance items and tax fell to KSh 540 million from KSh 756 million.
The biggest driver of the downturn was the loss of the exceptional foreign-exchange gains that lifted the 2024 results. Last year, the Serena hotel operator, reported KSh 879 million in finance income and a KSh 1.4 billion swing in net FX effects, which pushed profit after tax to KSh 1.317 billion. The group’s operating cash flow was solid, but underlying earnings were flattered by the currency revaluation of US dollar loans and lease liabilities. In 2025, exchange rates have been broadly stable, eliminating the non-cash gains that boosted the prior year.
The half-year statement shows the scale of the reversal. TPS recorded a KSh 17.7 million FX loss, compared with a KSh 762 million FX gain in the same period last year. Profit before FX and tax fell to KSh 16.5 million from KSh 239.9 million, highlighting the pressure on core operations even before translation effects. Management also noted higher provisioning needs under IFRS 9 as business projections were revised to reflect the weaker environment.
Regional security concerns have added strain with travel advisories and cancellations affecting Serena’s leisure pipeline in Kenya and parts of the region, impacting the critical high-yield segments that underpin second-half performance. Translation losses of KSh 99 million in the half year also reflected currency weakness in some of the group’s markets.
