There seems to be light at the end of the tunnel for Capital Hotel Plc, as the hospitality company reported its first profit since the pandemic year in its latest financial results.
Data obtained from the nine-month financial results of the hospitality firm show that its profit grew to N187 million in the nine-month period of 2022, up from the N83.78 million loss reported in the nine-month period of 2021.
Furthermore, the firm boosted its revenue by 100 percent during the period amounting to N4.7 billion from N2.3 billion in the nine-month period of 2021, making it the highest nine-month revenue generated by Capital Hotel in ten (10) years.
Further analysis of the nine-month financial results available on the Nigerian Exchange Group (NGX) shows that although rooms contributed the highest to the revenue generated during the period (N2.38 billion), the 107.9 percent growth in the food and beverage revenue-generating segment was the major driver of the boost seen in revenue.
The food and beverage revenue-generating segment grew to N1.9 billion in the nine-month period of 2022 from N926 million in the nine-month period of 2021.
Cost of sales accounted for 89.6 percent of its total revenue and grew by 93 percent to N4.21 billion in the nine-month period of 2022 from N2.18 billion in the nine-month period of 2021, with rooms contributing the highest to the growth (up 176 percent).
Consequently, the profit margin improved to 3.98 percent in the nine-month period of 2022 from -3.57 percent in the corresponding period of 2021.
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Other operating income reported by the hospitality company declined by 34 percent to N51 million in the nine-month period of 2022 from N77.7 million in the nine-month period of 2021.
Also, its total operating expenses (administration and general expenses) declined by 10.65 percent in the nine-month period of 2022 to N306 million from N342.8 million in the same period of 2021.
However, due to the high-interest rate environment, Capital Hotels managed to recover from their expenses by reporting a 176 percent surge in finance income which grew to N42.5 million in the nine-month period of 2022 from N15.4 million in the corresponding period of 2021.
The hotel reported total assets of N28.9 billion in the nine-month period of 2022, indicating a 61 percent increase from N17.93 billion in the nine-month period of 2021, while its shareholders’ equity grew by 74 percent to N25.33 billion from N14.55 billion in the periods under review.
Cash and cash equivalents reported by the firm surged by 1,163 percent to N1.19 billion in the nine-month period of 2022 from N942 million in the corresponding period of 2021, indicating a significant increase in cash and liquidity.
Furthermore, the movement of cash and cash equivalents shows that the firm generated N11.38 billion from its core operating activities during the period, up from N-279 million in the same period of the previous year.
It also reported negative net cash flow from investing activities amounting to N434 million in the nine-month period of 2022 due to the purchase of property, plant and equipment, loan and receivables, and capital work in progress which formed a large chunk of the cash outflow amounting to N241 million, N160 million, and N116 million respectively.
The hotel paid out dividends during the period, bringing net cash flow from financing activities to N-41 million in the nine-month period of 2022.
Capital Hotel reported earnings per share of N11.85 per share in the nine-month period of 2022, up from N-5.42 per share in the nine-month period of 2021.
