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Tourist Company of Nigeria Plc, the parent company of Federal Palace Hotel, has announced a pre-tax loss of approximately N31.6 billion for the financial year ending in December 2023.
Compared to 2022, the company's losses surged by nearly 900%, with a pre-tax loss of N3.2 billion.
The substantial losses resulted in the company's shareholders' funds being completely depleted, leading to a negative equity of N7.8 billion.
Key Highlights FY 2023 vs FY 2022
Revenue: N4.26 billion, +7% YoY; Expenditure: N5.6 billion, +21% YoY; Operating loss: N1.4 billion, +104% YoY; Net finance costs: N30.3 billion, +1111% YoY; Loss before tax: N31.6 billion, +896% YoY; Loss for the year: N31.7 billion, +886% YoY and Net cash generated from operating activities: N145.2 million, -38% YoY.
The company's losses were primarily attributed to significant forex losses amounting to N30.3 billion, largely stemming from its foreign currency loans.
These loans, totaling $67.7 million, are owed to its related companies, namely Ikeja Hotel, Sun Hotel, and Omamo Investment Ltd.
The loans from Omamo Investments Ltd are currently under dispute as indicated in the financial filings.
In the financial year, Federal Palace Hotel saw a 25% increase in revenue from its hospitality business, generating N2.93 billion compared to N2.36 billion in 2022.
However, its casino revenue decreased by 18% to N1.34 billion from N1.63 billion in 2022.
During the year, the hotel's cost of sales for food and beverages decreased by 24% to N215 million from N281.3 million, reflecting reduced sales in this category.
Additionally, the company's power and fuel costs increased by 8% during the year to N1.06 billion from N981 million.T
The hotel, predominantly owned by the South African hospitality group, Sun International, has a history of indebtedness to Omamo Investment Corporation, a company associated with some of its directors.
