The continuous weakening of the local currency against the United States dollar has worked in favour of Safari operators.
A peek into the full year financial results for two pan-African safari companies listed on Botswana Stock Exchange (BSE), Chobe Holdings Limited and Wilderness Holdings Limited, shows that weakening of the Pula against the US dollar helped accelerate revenues for both companies, operating eco-tourism lodges in selected African countries. The Pula depreciated against the US dollar (6.3 percent), euro (5.9 percent), British pound (4.6 percent) and the yen (3.2 percent), while appreciating against the rand (5.0 percent) in May.
On an annual basis (twelve months to May 2013), the Pula depreciated against the euro (13.6 percent), US dollar (9.3 percent), and the pound (7.5 percent) while it appreciated against the yen (16.3 percent) and the rand (7.2 percent). “During the year under review occupancies increased only slightly over the prior year which, given the continuing downturn in the Northern Hemisphere is considered satisfactory. Revenues however rose by 13 percent thanks to an increase in achieved bed rates in US Dollar terms and the weakening of the Pula against the US Dollar,” said Chobe Chief Executive Officer, Jonathan Gibson in the company FY results.
His statement corroborated that of Derek de La Harpe, Chief Financial Officer of Wilderness Safari owners, who said local currencies have been weaker against their main trading currencies (US Dollar and the Euro) and this has worked in their favour as it boosted revenue. “The Group has seen a recovery in demand from its primary source market, the United States, partially offset by continued soft demand from Europe,” de La Harpe continued. Together with his board chairman Parks Tafa de la Harpe said with 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 however is that turnover has increased by 13 percent to P1.2 billion,” they said in a joint statement. On the other hand Chobe revenues also jumped to P145 million from the P129 million seen previously, thanks to the weak Pula against the US$. Meanwhile Wilderness Holdings, Botswana’s largest safari operator with 59 luxury safari camps, a total of 1 028 beds, in eight Southern African saw its profits before tax accelerating by 103 percent to record P33 million, more than double what was achieved in 2012 FY results.
Profits after tax, which stood at P8 million on the prior corresponding period increased by 238 percent to settle at P28 million. Chobe profits on the other hand settled at P26 million tumbling from the P29 million seen on the previous reporting period. Chobe Holdings owns and operates 10 eco-tourism lodges and camps on leased land in northern Botswana and the Caprivi Strip in Namibia with a combined capacity of 290 beds under the brands Desert & Delta Safaris and Ker & Downey Botswana. Safari Air, a wholly owned air charter operator, provides air transport services to the group’s camps and lodges. Desert and Delta Safaris (SA) (Pty) Ltd, another wholly owned subsidiary operating in South Africa, provides reservation services to the group.