Wilderness earnings up three fold on US recovery

BRIAN BENZA
Staff Writer | Friday May 31, 2013 00:00

According to the company's financial results, the recovery in the US market, though partly offset by soft demand from the European market, coupled with the weakening of the Rand and the Pula against the greenback, pushed up the company's turnover.'Local currencies have been weaker against our main trading currencies (being the United States dollar and the Euro) and this has worked in our favour. The positive impact of the Rand weakening by an average of 13 percent against the US dollar over the year was partially offset by a 2 percent unfavourable movement in the Rand/Pula cross rate. The net result is that turnover has increased by 13 percent to P1.2 billion,' said the company.

As a result, the group's after tax profits amounted to P27.7 million, representing a 238 percent increase over the comparable result last year.The company, which owns and operates 59 luxury safari camps, with a total of 1,028 beds in eight southern African countries, recorded a 3.7 percent decline in total bed night sales largely due to the permanent closure of non-performing camps and the temporary closure of others for maintenance.'If we normalise for these closures, we achieved a 1 percent increase in bed night sales. For the 2012 calendar year, we increased our rates on average by between 4 percent and 10 percent.

It is gratifying to note that our US dollar turnover increased by 6.4 percent and that source currency turnover has increased in all other currencies except the Namibian dollar,' said the company.Operating profit for the period increased by 61 percent to P47.9 million while net finance costs increased from P5 million in 2012 to P8.2 million as the result of increased borrowings as well as the effects of devaluation of the Rand and the Pula on finance charges incurred on US dollar loans. Wilderness says as a result of weak demand from its major source markets following the global financial crisis, combined with the strength of local currencies, the group has experienced difficult years since listing in 2010.

The group then embarked upon a strategic plan designed to address changes in the market, improve guest service and increase efficiencies and to re-size certain businesses for lower levels of demand. 'We believe that the results of this process are now being seen: guest feedback is consistently better than ever before, loss-making businesses have been closed or restructured and the results of efficiency measures are being seen in our operational costs. We expect to see a slow but steady strengthening of our major source market, the United States, with a muted recovery from source markets in Europe against a backdrop of ongoing uncertainty in the world economy,' the company added.