SUNBIRD 2022 AGM QUESTION & ANSWER

Posted 20 July 2023

Q1. Looking at the solid financial performance for 2022, Has Sunbird recovered from the COVID-19 pandemic?

Indeed, the Group had a solid performance in 2022, picking up from the recovery performance of 2021 from the COVID-19 pandemic. The business trajectory indicates that there is good recovery and the business is positioned for growth, with an indication for good performance in 2023 based on the half year trading statement issued in June 2023 that indicated that the performance for half year was expected to be better than previous corresponding period by more than 280%.

Despite this good performance, we realize that as the business improves, there is significant need to re-invest in our operational capabilities to ensure that guest experience is well optimized so that we sustain the momentum.

Q2. What, in your opinion has helped the Group’s profit performance?

The performance was driven by the Group’s focus on responsive Sales & Marketing strategies to ensure increased production from current and new business. Focus was also on ensuring continued improvement of guest experience through constant review of our service standards in order to maintain repeat business and remain the preferred choice of hospitality services.

Prudent cost management and business process re-engineering were also key in ensuring a solid performance. The general improved trading environment also made a difference in the performance, as ease of movement has returned to pre-pandemic levels, leading to increased international arrivals in the country, thus creating increased demand for the services albeit increase of supply on the market.

Q3. What are the key strategic items that Sunbird is driving?

In 2022, we rolled out our 5-year strategic plan. The roadmap for the next 5 years encapsulates the key strategic areas that we are driving in order to achieve key performance indicators for growth. Product development and improvement are key strategies that we are currently pursuing. Of significant importance are the planned key development projects that include new facilities, which are at feasibility level and rejuvenations in the existing properties.

As part of our efforts to ensuring a full product development in Salima, we will soon ground break for construction of a conference centre at Sunbird Waterfront and Livingstonia, aimed at enhancing the meetings experience at the location. This is part of our efforts to consolidate prior developments that have taken place at the location that include; Construction of Sunbird Waterfront, refurbishment of all rooms and arrival experience at Sunbird Livingstonia, and currently underway a full refurbishment of the kitchen.

At Sunbird Mzuzu, underway is a full refurbishment of the accommodation rooms as well as conference rooms; we are at 50% completion of the renovations for the accommodation rooms that have already enhanced the customer experience. The refurbishment of the remaining rooms is expected to be completed by end of third quarter (September 2023).

Recently, we have completed the refurbishment of all the rooms at Sunbird Kuchawe, we believe this should perfectly compliment the prior enhancements to the product that included; heated swimming pool, gym and sauna.

Our focus within this strategic period is to also invest in the culinary experience for our patrons. In that vein, we plan to recruit on a long-term basis a Consultant Chef, to ensure the Group is aligned with the current and emerging trends, and able to meet the ever-changing needs and expectations of our most discerning customers that are looking for trendy, experiential and lifestyle culinary experience.

Our people are the key drivers of guest experience, in this plan period of importance is to re-invest in our people through exposure and continuous training to ensure they are well equipped to deliver and exceed guest expectations at all our hotels and resorts.

Q4. As the leading Hospitality chain, how are you playing your role on Green issues?

In our commitment to meeting stakeholder’s expectations, of paramount importance remains our commitment to people and planet issues. Our corporate social responsibility strategy, which falls under health, education, environment and youth development pillars, remains the main anchor of Sunbird giving back to the people, and ensuring that we remain responsive and committed to assisting the communities we do business in, and making an impact in their way of life.

Furthermore, we continue to focus on ensuring that we play a role in carbon foot print reduction, through deliberate strategies that make an impact across our whole operation chain, this includes use of green energy through installation of renewable energy systems such as solar panels to generate clean energy, use of energy efficient light bulbs, sourcing environmentally friendly products and supplies for the hotels, reduction of plastic water bottles  and ensuring that future construction projects are aligned to planet issues.

Q4. Any lessons learnt from the COVID-19 pandemic?

Looking at the devastating impact caused by COVID-19, this brought about a re-energized thought process on the sustainability of our business, and how we can make it more resilient. In our current strategic plan, emphasis is also on the need to extend the brand through sub-branding with the objective of targeting other segments within the hospitality industry that we have previously been unable to venture in due to our current structure.

Sunbird is also increasingly focusing on the domestic market and putting in place strategies to further enhance production from this segment primarily on the leisure front through investment in the required product, and ensuring a competitive price positioning for the targeted market.

Sunbird remains committed to extending the brand’s footprint locally as well as regionally. We are pursuing these efforts in earnest and will be driven through management contracts, greenfield investments and acquisitions where applicable. We believe that venturing in new destinations will be key in mitigating against any local economic headwinds that affect the business.

Q5. What is your word to locals who believe that Sunbird products are not for the domestic tourist?

Sunbird Tourism is a local brand, with the dominant source market being domestic. Our products and services are also developed in line with the targeted market, hence our menus and services have elements of the Malawian culture, which include our famous and original Malawian dishes. 

As the home of hospitality, we are continuously reviewing our pricing and packaging in order to attract the domestic market through various promotions, which include our weekend promotions across the hotels and resorts. Furthermore, our rewards program with local and international redemption platforms rewards our domestic customers where it counts.

Across all our hotels and resorts, we continue to offer a wide range of experiences, while appreciating the diverse client base that we have, there is something for all at Sunbird Hotels & Resorts.

Q6. Looking at the financial performance, did the company declare any dividend?

Due to the satisfactory performance, Sunbird declared an interim dividend of K131 million representing a dividend per share of K0.50 and that was paid in November. A final dividend of K393 million representing K1.50 per share was declared in respect of the financial year ended 31 December 2022. This brings the total dividend for the year to K524 million representing K2.00 per share.

Q7. Looking ahead how is the business outlook for 2023?

Looking ahead, the year looks relatively positive despite uncertainties due to the prevailing economic environment. The increase in the number of airlines operating in Malawi specifically through the resumption of the South African Airways, and soon incoming Airlink, projects increased international arrivals and further opening up of the destination.

The downside risks emanating from economic pressures due to increase in interest rates, soaring inflation levels and intermittent supply of fuel are expected to cause some disruption, however the board and management are confident that the performance trajectory of the Group will be maintained through strategic interventions for growth.