Business / Companies
TA posts an improved operating result
02 Sep 2011 at 02:41hrs | Views
TA posted an improved operating result to record an attributable profit of $1.2 million from a loss of $1.1 million. Revenue growth of 17% year on year was driven by a 32% increase in hotel revenues and a 172% growth in investment income.
Approximately 58% ($1.7 million) of the investment income was from the revaluation of investment property as the yield on the commercial property improved to 12% from 7% the prior period. Costs were well maintained resulting in EBITDA growing ahead of revenue growth at 142% to $3.8 million.
Local operations contributed a loss of $0.8 million to group operating profits (impacted by corporate head office) and outside of Zimbabwe operations contributed a positive $1.3 million. The insurance businesses posted PBT of $4.3 million, up 10% year on year driven by fair value adjustment of investment properties (Zimbabwe operations) and improved underwriting results.
Share of associate was negatively impacted by the performance of ZFC and PGI which recorded losses of approximately $0.6 million each. Sables posted a reduced loss of $0.5 million from a loss of $1.2 million the corresponding period, benefiting from a reduced negotiated viable electricity tariff.
Cash generation improved with cash generated from operations up 25% year on year to $2 million. Of the $13.6 million group cash holding, approximately 96% is outside of Zimbabwe.
The bulk (57%) of the group balance sheet is outside Zimbabwe.
TA accessed $6 million seven year money at 11% p.a. (all in costs) for the refurbishment of the Zimbabwe hotels. The group is reviewing the investment in Uganda as the unit continues to underperform. The right sizing of all businesses is on going.
Management state that the long term solution for the local fertilizer industry is coal gasification and in the interim the company will increase the importation of ammonia. The investment in PGI is no longer core and will be reviewed. TA's Botswana operations remain profitable and in our view, good investments.
Local hotel and insurance operations performance continue to improve. ZFC business cycle has changed with the first three quarters of the year now a cost accumulation period and sales only realised in the last quarter. The share price has lost some 17% YTD and is down 71% from its January 2010 levels of 58 US cents a share.
Approximately 58% ($1.7 million) of the investment income was from the revaluation of investment property as the yield on the commercial property improved to 12% from 7% the prior period. Costs were well maintained resulting in EBITDA growing ahead of revenue growth at 142% to $3.8 million.
Local operations contributed a loss of $0.8 million to group operating profits (impacted by corporate head office) and outside of Zimbabwe operations contributed a positive $1.3 million. The insurance businesses posted PBT of $4.3 million, up 10% year on year driven by fair value adjustment of investment properties (Zimbabwe operations) and improved underwriting results.
Share of associate was negatively impacted by the performance of ZFC and PGI which recorded losses of approximately $0.6 million each. Sables posted a reduced loss of $0.5 million from a loss of $1.2 million the corresponding period, benefiting from a reduced negotiated viable electricity tariff.
The bulk (57%) of the group balance sheet is outside Zimbabwe.
TA accessed $6 million seven year money at 11% p.a. (all in costs) for the refurbishment of the Zimbabwe hotels. The group is reviewing the investment in Uganda as the unit continues to underperform. The right sizing of all businesses is on going.
Management state that the long term solution for the local fertilizer industry is coal gasification and in the interim the company will increase the importation of ammonia. The investment in PGI is no longer core and will be reviewed. TA's Botswana operations remain profitable and in our view, good investments.
Local hotel and insurance operations performance continue to improve. ZFC business cycle has changed with the first three quarters of the year now a cost accumulation period and sales only realised in the last quarter. The share price has lost some 17% YTD and is down 71% from its January 2010 levels of 58 US cents a share.
Source - Imara Stockbrokers
