Wilderness is a major player in Africa (Pic By wildlifeafrica.co.za)
Wilderness Holdings is hoping the Ebola virus does not re-occur while it is also worried about the strengthening of the greenback-which is the currency that the group sells in.
Announcing the unaudited interim condensed financial results for the six months ended 31 August 2015, the listed tourism company revealed that in difficult economic conditions, the effects of the Ebola outbreak became apparent over the first six months of the year as bednight sales declined with guests electing to travel to destinations other than Africa.
In addition, the strength of the US Dollar against the South African, British and European currencies made South Africa and European destinations more attractive to our American guests as these locations are generally priced in currencies other than the US Dollar. Despite the difficult trading environment, the group limited the negative impacts to a decline of 6% in headline earnings.
“The Ebola outbreak was declared over by the week of 4 October 2015, however, the World Health Organisation warned that an outbreak could re-occur,” Chief Executive of the company known as Wilderness Safaris, Keith Vincent said.
“Should the virus not re-emerge we expect more confidence to return to the market in the second half of the year and our forward sales position for 2017 is already showing signs of such improvement. However, as the Group sells primarily in US Dollars the continued strength of the currency is expected to impact demand for our product.”
The group revealed that on a restated basis, revenue for the first half of the year declined by 3% to P539 million (2014: P556 million) mainly due to lower bednight sales, especially in the Premier camp category, and a decline of 23% in our road transfer business that is less dependent on bednight sales but is reliant on the Asian and group series business.
It said this was, however, largely offset by a benefit from the stronger US Dollar. Notwithstanding the challenging conditions the Group recorded 64% occupancy rate (2014: 71% restated). Overall bednight sales decreased by 6% to 78 307 (2014: 83 620 restated), with 5% increase in available bednights to 123 280 (2014: 117 178 restated). While the Classic camp category remained steady in bednight sales, all other categories reported decreases with Premier down 10%, Adventures down 7% and Tour Series down 12%.
Wilderness said Botswana recorded the largest decline in bednight sales but still achieved a commendable occupancy rate of 65% (2014: 74%). “If we exclude various accounting adjustments segmental profit increased by 5% due to the assistance from the stronger US Dollar.”
On the other hand, Namibia recorded an increase in bednight sales but an overall decline in profit of 17% as a result of on-going restructuring of our flying business as we attempt to move away from servicing third party business. Zambezi bednight sales were 9% down on prior period with segmental profit down 58% as the implementation of the new VAT rules in Zimbabwe came into effect and the business absorbed half of those costs.
In addition, the road services business declined by 34% unrelated to occupancy and the flying operations operated at lower load factor due to the decline in the Tour Series business. South Africa would have been down in line with occupancy had it not been for the 33% decline in profit in our road transfer business.
Wilderness also revealed that the recently announced investment in two new camps in Rwanda is progressing well and expect to see the benefits of that in the 2018 financial year.
The group said its strategic intent is to invest in African tourism markets which offer authentic wildlife and safari experiences and where we feel our specific ecotourism model can have positive conservation and community impacts. As set out in our cautionary announcements we continue to be engaged in negotiations in this regard.
Wilderness Holdings is globally respected ecotourism company present in the prime wilderness and wildlife areas of southern and east Africa. Pivoted off the continent’s most diverse portfolio of luxury safari camps the Group operates a vertically integrated business model that combines the owning of product (safari camps) with ownership of associated support services (such as a bush airline, and touring and transfer companies), and ownership of a marketing, sales and reservations entity (an inbound tour operating business).
