Cresta Marakanelo, the listed regional hotel group said its revenues rose last year but bemoaned the heightened competition in the Botswana market. According to its audited annual financial statements for the year ended 31 December 2015 , the group achieved revenue of P320 million, which was 5% growth from P303 million realised on the previous year.

“The EBITDA achieved for the period under review was P63.6 million which was an 8% increase from P58.6 million achieved last year,” Cresta said. However, it added that EBITDA was impacted by the 5% increase in revenues and also a 3.5% reduction in operating costs among other things.

It said profit from operations was P41.1 million from a prior year profit of P34.9 million, which represents a 18% increase over the past year. “Owing to strict cost controls and improved marginal contributions at key units, profit before tax increased by 12% from P32.3 million to P36.2 million”.

Cresta said the Botswana market continues to face challenges with increased competition especially in urban areas like Gaborone, Francistown and Palapye. “Consumers are becoming more price sensitive and increasingly demanding more value for their spend,” it said. “The company has had to be creative in its marketing activities to lure business into the hotels”.

The company’s operating profit of P40.9 million reflects an operating margin of 13.8% (24:13.0%), it said. “This reflects strong cost control, the improved contribution to operating margins from the most hotels during the second half of the year and also a 62% P2.4 million) reduction in lease straight-lining charges under IAS17”.

The statement accompanying the results added that trading conditions in the Zambian operations continued to be challenging although the company continued to be innovative. The company however came up with a strategy at the beginning of 2015 to win over lost business.

“The strategy bore fruit as the company recorded growth in revenues in Kwacha terms at Cresta Golfview Hotel”. Revenue grew by 19% compared to the same period last year in Kwacha. However, it said that on the back of continuing strengthening of the Pula against the Kwacha, the company recorded a P5.97 million foreign exchange loss on the Pula denominated loan used to finance the acquisition of the Zambian assets.

“This resulted in the hotel recording a loss of P6.4 million for the year compared to a loss of P4.5 million in the corresponding period in 2014”.