TPS Eastern Africa (TPSEAP), the owner of the Serena Hotels chain, has reported a profit after tax of KShs. 570 million in the six months ended 30th June 2024 from a loss of KShs. 30.2 million realized same period last year.
- •The results are due to an increase in demand for leisure, corporate and Meeting, Incentives, Conferences and Exhibitions (MICE) business.
- •TPSEAP achieved a 20.4 per cent increase in turnover compared to the same period in 2023 to stand at Shs. 4.5 billion (2023: Shs. 3.8 billion) mainly driven by increase in occupancy.
- •Despite emerging from the red during the period, the company cautioned against using the performance to forecast full year result.
“Given the seasonal nature of the tourism industry in East Africa and the uncertainty arising from the challenges during the first six months including e.g. heavy rains, flooding and disruptions resulting from political demonstrations in Kenya, the financial performance of TPSEAP for the first half of year 2024 should not be taken as a basis to extrapolate a full year’s forecast,” said TPS Eastern Africa Company’s Secretary Dominic Nganga.
Total operating expenses also grew with notable increases in employment related expenses, energy costs and property maintenance costs necessary to sustain operating standards and preserve guest satisfaction. Other operating expenses were effectively managed resulting in overall efficiency. As a result, Profit before unrealised exchange difference, interest, depreciation, and taxation recorded a 2.4% growth compared to previous year, to stand at Shs. 814 million (2023: Profit of Shs. 795 million).
The appreciation of the Kenya Shilling against the US Dollar, led to non-cash unrealized exchange gain of Shs. 453 million on the Company’s US Dollar-denominated debt. Excluding the impact of this unrealised exchange gain/(loss), Profit before tax has increased by 14 per cent compared to previous period. Consequently, the Earnings Per Share has improved to Shs. 1.89 compared to previous period Loss per Share Shs. 0.18.
Serena also faces regional risks marked by political uncertainty, security concerns, high interest rates, currency fluctuations, rising inflation and cost of living, including energy costs. These challenges could be compounded by broader macroeconomic factors, such as economic instability, public health concerns (mpox), challenges associated with climate change, and emerging geopolitical tensions within and outside the East Africa region.
TPS Serena operates 35 hotels and a selection of safari camps, guest lodges, resorts, and other hospitality businesses in 9 countries.