Photo credit: City Lodge Hotels blog
City Lodge announces R486.6-million net loss for year
Hotel group is one of many to be severely impacted by the lockdown and consequent closure of its properties.
Photo credit: City Lodge Hotels blog
City Lodge Hotels has announced a R486.6-million net loss for the year to June. Like so many hospitality businesses, it was hard hit by the lockdown.
The country’s measures to fight the pandemic saw almost all of City Lodge’s 62 hotels closed. The group now expects that trading levels will only return to 2019 pre-pandemic levels by the 2022 financial year.
Board says no dividend payable
Given the severe impact on cash flow and the group’s bottom line, the board has decided that no final dividend will be paid for the year to June. It also does not intend to pay dividends in the short term.
“The declaration of future dividends remains subject to satisfying solvency and liquidity requirements,” City Lodge said.
Its results for the year to June 2020 show a net loss of R486-million, versus a profit of R205.5-million in the previous year.
One of its most challenging years
The company’s CEO, Andrew Widegger, said the year has been one of the most challenging in the group’s history due to the impact of the pandemic on global and local economies, and on the travel and hospitality industry in particular.
“The impact of the Covid-19 pandemic on the group’s business and results of operations generally increased in magnitude and severity following the commencement of strict lockdown protocols in South Africa on March 27 2020. Similar lockdown protocols were followed shortly thereafter in the other African countries where the group operates.
“These measures resulted in the temporary closure of almost all of the group’s 62 hotels, except for those hotels which remained open on a limited basis providing quarantine facilities to repatriated citizens, and hotels providing support to government authorities and essential and critical business continuity services,” he noted.
City Lodge said it successfully raised R1.2-billion through a rights offer in August and intends to use the net proceeds to repay a substantial portion of amounts owing under its secured facilities, retain on deposit an amount equal to the settlement of the company’s guarantee for its BEE transaction, and to improve liquidity.
