TPS East Africa issues profit warning

December 21, 2015
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Foreign leisure, and to a lesser extent,corporate  business segments took a cautious approach due to the elevated travel advisories and other forms of security alerts issued by governments of main source markets/FILE
Foreign leisure, and to a lesser extent,corporate business segments took a cautious approach due to the elevated travel advisories and other forms of security alerts issued by governments of main source markets/FILE
NAIROBI,Kenya,Dec 21-TPS East Africa has issued a profit warning for the year ending December 31,2015.

The listed firm which owns Serena chains of hotels says the profit will be lower by 25 percent compared to last year,2014.

“TPS Eastern Africa Limited makes this announcement pursuant to the requirements of Capital Markets Securities, (Public Offers, Listings and Disclosures)2002 and the Nairobi Securities Exchange Listing Regulations,” the company Managing Director Mahmud Jan Ahmed said in a statement on Monday.

He says the company faced a challenging business landscape in Kenya, which affected the other East African Region.

Foreign leisure, and to a lesser extent,corporate business segments took a cautious approach due to the elevated travel advisories and other forms of security alerts issued by governments of main source markets.

“The advisories,coupled with the negative international media reports since 2013,terrorist threats and local security incidents cumulatively led to a significant slowdown in the new leisure bookings and withdrawal of charter flights to Kenya,” Mohamed explained.

Other challenges were the introduction of Value Added Tax(VAT) on tourism services and park fees in September 2013 which he says made Kenya uncompetitive relative to other safari destinations.

During the last quarter of 2014,the Ebola epidemic originating from West African countries also negatively impacted all African tourist destinations during the year 2015.

“Despite the above, the company in 2015 took measure to safeguard shareholder value,maintain market share,assets in good condition so as to avoid compromising standards?of product and service and have implemented efficiency measures to reduce energy,procurement and general operating costs,” he said.

The company he says is however looking at the future prospects of the Tourism industry in East Africa with optimism.

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