TPS Eastern Africa Plc, the operator of the Serena hotels brand, has reinstated dividends after growing its profit 2.8 times in the year ended December 2024.
The firm has declared a dividend of Sh0.35 per share or a total of Sh98.9 million, payable on July 30 to shareholders on record as of June 30.
The listed hospitality firm recorded a net profit of Sh1.3 billion in the review period, up from Sh457.7 million a year earlier. The company’s revenue for the year rose 5.2 per cent to Sh10.1 billion, attributed to all subsidiaries delivering positive earnings.
“In 2024, all TPS entities delivered positive earnings before interest, tax, depreciation and amortisation,” said the company.
Its financing costs shrank to Sh670 million from Sh1.5 billion while its finance income more than doubled to Sh879 million from Sh323 million, riding on the appreciation of the shilling during the year.
A strong shilling favours institutions holding foreign currency-denominated obligations, while a weakening leads to the liabilities ballooning, hurting the borrower.
Finance income relates to interest earned from forex and financial assets such as fixed deposits and government securities.
“The appreciation of the Kenya shilling against the US dollar resulted in a non-cash unrealised exchange gain of Sh830 million, compared to a non-cash unrealised exchange loss of Sh1.03 billion the previous year on the group’s US dollar-denominated liabilities,” said TPS.
TPS is seeking to protect itself from the volatile exchange rates by holding dollars received from customers to pay its dollar-denominated debts.
“The group’s US dollar-denominated revenue continues to provide adequate coverage to meet its US dollar loan obligations due in 2025 and beyond,” said TPS.
The listed company cut its borrowings by Sh1 billion during the year to Sh2.5 billion, mainly through repayment of long-term debt.
TPS saw its operating expenses grow by 10 percent to Sh3.6 billion as inflation remains a headache to companies operating in East Africa.
TPS owns and operates a collection of 35 upmarket properties, including hotels, resorts, safari lodges, camps, palaces and forts in the eastern African countries of Kenya, Tanzania, Zanzibar, Uganda, Rwanda, Mozambique and the Democratic Republic of Congo.
TPS released its full-year results two weeks past the deadline set by the Capital Markets Authority, as its newly appointed auditors, KPMG, worked on restating its prior year results to make corrections related mainly to accounting for leases under IFRS 16 and minority interests.
The profit growth follows a jump in tourist arrivals, whose numbers grew 14.7 per cent last year to 2.39 million.
Competition in the Kenyan hospitality sector has been on the up, with more international brands setting up in the country.
The country saw 2.5 million beds come into the market last year, pushing the available beds to 35.5 million.
The tourism sector is on a rebound, having taken a heavy hit from travel restrictions set by countries during the Covid-19 pandemic.
