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CITY LODGE HOTELS LIMITED - Trading statement

Release Date: 25/02/2021 15:57
Code(s): CLH     PDF:  
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Trading statement

City Lodge Hotels Limited
“City Lodge” or the “Company”
(Reg. No. 1986/002864/06)
(Incorporated in the Republic of South Africa)
Share Code: CLH    ISIN Code: ZAE000117792

Trading statement

In terms of the JSE Limited Listings Requirements, companies are
required to publish a trading statement as soon as they are
reasonably certain that the financial results for the current
reporting period will be more than 20% different than those of
the prior comparative period.

In this regard, shareholders are advised that, for the six
months ended 31 December 2020, the Company expects to report:

•   normalised headline earnings - loss of between R234.6 million
    to R246.6 million, compared to normalised headline earnings
    of R80.4 million for the six months ended 31 December 2019
    (“HY2019”);

•   normalised diluted headline earnings per share (“HEPS”) -
    loss of between (52.9) cents to (55.6) cents compared to
    normalised diluted HEPS of 184.8 cents for HY2019;

•   basic earnings per share (“EPS”) - loss of between (129.4)
    cents to (136.0) cents compared to basic EPS of 126.4 cents
    reported for HY2019; and

•   basic HEPS - loss of between (61.0) cents to (64.1) cents
    compared to basic HEPS of 126.4 cents reported for HY2019.

The basic EPS loss includes an impairment loss of R293.0
million, mainly associated with the hotels in the East Africa
region. The Covid-19 pandemic has had a devastating impact on
these local economies and their hospitality industry. The
prolonged recovery is expected to last in excess of 18 months,
which has resulted in management’s revision of impairments. The
East Africa region is highly dependent on international travel,
mainly from North America and European markets, which have been
worst impacted by the pandemic, and the impact of the second
wave in these regions has mandated more aggressive travel
restrictions by governments, which has deteriorated the short
term prospect of recovery in East Africa.

The decrease in the group’s earnings is as a result of the
ongoing and severely detrimental impact of the Covid-19 pandemic
and the associated lockdown restrictions on movement, travel and
the economic activities. The travel and hospitality industry has
been worst hit by the pandemic. The gradual easing of lockdown
restrictions between July and November 2020 led to a steady
demand-based re-opening of the Company’s hotels indicating some
signs of recovery, albeit slow. This was however short-lived
with the surge in infections in late November 2020 through to
January 2021, and the consequent move back to stricter lockdown
measures under Alert Level 3.

The normalised headline earnings, normalised diluted HEPS, basic
EPS and basic HEPS are collectively referred to as “Estimated
Financial Information”.

Normalised headline earnings and normalised diluted HEPS
comprise   headline  earnings  adjusted   for  the   effects  of
transactions relating to the BEE SPVs and those of a non-
recurring and/or core nature. They are the responsibility of the
directors of City Lodge and have been provided for illustrative
purposes only. Due to their nature, normalised headline earnings
and normalised diluted HEPS usually differ from City Lodge’s
HEPS.

Shareholders   are   advised   that   the   Estimated Financial
Information on which this trading statement is based has not
been reviewed or reported on by the Company’s auditors. City
Lodge’s results for the six months ended 31 December 2020 will
be released on SENS on or about 26 February 2021.

25 February 2021
Bryanston

Sponsor
Nedbank Corporate and Investment Banking

Date: 25-02-2021 03:57:00
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