TPS Eastern Africa, the operator of Serena Hotels, has posted a Sh870.87 million net profit for the financial year ended December 2023, marking a 2.3 times jump from the previous year on increased business.
The latest profit is a growth from Sh379.69 million posted in the previous year and translates to record earnings, overtaking the previous peak net income of Sh615.8 million in 2011.
TPS said its portfolio of 22 hotels, resorts, safari lodges, and camps within the Eastern Africa region, regained its footing, supported by a return of confidence in the foreign leisure and corporate market segments.
“This was further complemented by significant growth in business volumes from both domestic and regional markets spanning leisure, corporate travel, events, and functions. Notably, Serena City hotels continued to be preferred venues for high-profile events and governmental and diplomatic functions,” said TPS in a commentary accompanying the financial results.
Revenue from contracts with customers rose by 48 percent to Sh9.68 billion from Sh1.85 billion posted in the previous year. Investors will however not get a dividend from the record profit, with the board saying it has lined up “substantial” investments this year.
The firm said it is going to focus on upgrading the technological infrastructure, and enhancing guests’ facilities and comfort while investing in renovation and refurbishment of various units’ guest rooms and public areas.
“This decision (to not declare dividends) is informed by prioritising substantial investments now required in product upgrades and improved technology including enhancement of business resilience measures. It is important to appreciate that these investments were put on hold due to the pandemic,” said TPS.
During the year, TPS was impacted by the depreciation of the shilling which shed a quarter of its value against the dollar. Finance costs rose 92 percent to Sh1.12 billion from Sh586.6 million.