Blantyre Hotels projects up to $1.1 million loss in 2024 amid rising costs and OASIS consolidation

At a Glance

• BHL projects a 47-56% drop in consolidated profit before finance charges and tax, falling between MWK580 million($0.33 million) and MWK700 million ($0.4 million).
• Consolidated loss after tax is expected to rise 85-102%, reaching up to MWK1.85 billion($1.1 million), due to Lilongwe Hotel project costs and OASIS consolidation.
• Increased expenditure tied to the ongoing rights issue and deferred tax adjustments contribute to financial strain.

Blantyre Hotels Plc, one of Malawi’s leading hospitality groups majority-owned by Sunbird Tourism, forecasts a significant decline in profit before finance charges and tax for the fiscal year ending December 31, 2024.

The company expects profit before finance charges and tax to range between MWK580 million($0.33 million) and MWK700 million ($0.4 million), representing a 47 percent to 56 percent decrease from the MWK1.3 billion($0.75 million) projected in the Rights Offer Prospectus.

This drop is primarily due to OASIS Hospitality Limited’s financial loss, as BHL anticipates consolidating OASIS as a subsidiary after the ongoing rights issue.

BHL navigates market challenges

In compliance with Malawi Stock Exchange requirements, BHL, which owns and manages Ryalls Hotel in Blantyre issued a trading statement to inform the market of an anticipated deviation of at least 20 percent in financial results from the previous period.

Despite the challenging market conditions, including rising operational costs and macroeconomic headwinds, BHL’s proactive disclosure underscores its commitment to transparency.

The expected loss after tax, projected to close between MWK1.7 billion($0.98 million) and MWK1.85 billion($1.1 million), reflects increased finance charges linked to obligations for the Lilongwe Hotel project, rather than operational losses from the Blantyre Ryalls Hotel.

This forecast represents an 85 percent to 102 percent increase in losses compared to the projected MWK918 million($0.53 million) loss stated in the Rights Offer Prospectus.

BHL profits hit by rising costs

BHL with a market Capitalization of MWK 12.22 billion ($7.05 million) recorded a consolidated profit before finance charges and tax of MWK309 million($0.18 million) for the year ended December 31, 2023. However, rising costs related to the ongoing rights issue, deferred tax adjustments, and the financial loss from OASIS Hospitality Limited have significantly impacted projections for 2024.

Blantyre Hotels Plc (BHL), majority-owned by Sunbird Tourism Plc, Malawi’s leading hotel chain and hospitality group, strengthening its portfolio in the hospitality sector across Malawi.