How hospitality companies lost N10.98bn in 1 year

A combined loss of at least N10.98bn has been incurred by Nigerian hospitality firms, Transcorp Hotels Plc, Ikeja Hotel Plc, and Capital Hotel Plc, in the 12 months of 2020.

When compared to their profitability scorecard in 2019, where the firms made a combined profit of N2.47bn in 12 months, this marks a huge blow.

Transcorp Hotels Plc reported the biggest loss in the 12-month period, posting a N8.97bn loss. It had in 2019 reported N613.73m profit.

Its revenue from contracts with customers dwindled by 50.2 per cent to N10.15bn from N20.40bn, according to its unaudited financial statements obtained from the Nigerian Stock Exchange.

Ikeja Hotel Plc, posted a loss of N1.73bn for the 12 months ended December 31, 2020, down from the N834.94m profit recorded in 2019.

Its unaudited financial statement showed that its turnover dropped to N5.06bn in the period under review from N12.51bn in the same period of 2019, representing a decline of 59.50 per cent.

Capital Hotel made a loss of N266.04m, compared to a profit of N1.02bn it recorded in 2019.

The firm’s turnover plunged to N1.94bn in the period under review from N5.18bn in 2019.

Transcorp Hotels just recently listed its Rights Issue of 2,642,124,511 additional Ordinary Shares valued at N10bn on the floor of the NSE.

Managing Director/Chief Executive Officer, Transcorp Hotels, Mrs Dupe Olushola, said 2020 was challenging while commemorating the additional listing with a digital Closing Gong ceremony at the Nigerian bourse.

She said, “On behalf of the National Council and Management of the Exchange, I congratulate the board and management of Transcorp Hotels Plc for their laudable commitment towards the sustained growth of this reputable brand.

“Transcorp Hotels Plc’s successful capital raise with a Rights Issue of 2,642,124,511 additional Ordinary Shares which was 99.3 per cent subscribed despite the prevailing macro-economic challenges is highly commendable.”

She added, “The past year has been a challenging one given the impact of the COVID-19 pandemic on the hospitality sector, and that Transcorp Hotels has not only survived but is firmly on the road to recovery is a testament of the efficacy of our initiatives and we thank you for your belief in us. Moving forward, we are optimistic about 2021 and we have begun the year in a strong position.

“We will continue to deepen our share and expand our market leveraging best in class technology and providing the highest service standard across our locations.”

Similarly, Ikeja Hotel Plc said that its third-quarter loss of N1.4bn in 2020 could affect its dividend declaration for 2020.

The company said, “The loss after tax of N1.4bn recorded by the group in the third quarter financial statements was due to the continued effects of the COVID-19 pandemic on the hospitality sector, and it’s likely to affect declaration of dividend for the year ended December 31, 2020.”