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Cresta Marakanelo Limited reduced its loss before tax by 17% to P9.2 million for the six months ended June 2026, even as revenue fell 6% amid continued weakness in Botswana’s business travel market.
The hotel group reported revenue of P164.9 million for the period, down from P174.9 million in the corresponding six months of 2025. Despite the lower revenue, operating profit improved by 39% from P2.8 million to P3.9 million, reflecting lower operating costs and improved margins.
Cresta's loss after tax, however, widened slightly to P10.9 million from P10.4 million a year earlier. The company incurred P13.1 million in finance costs during the period, although this was 6% lower than the P13.9 million recorded in the first half of 2025, helped by lease restructuring initiatives completed during the previous financial year.
The performance comes against a difficult backdrop for the group’s traditional business, with government and corporate travel demand remaining subdued. Cresta said business hotels account for approximately 76% of its room inventory, leaving a significant portion of the portfolio exposed to weaker domestic corporate travel.
The group is increasingly looking beyond this segment, with several of its leisure-oriented properties recording stronger performance. Cresta Mowana's revenue increased 9%, supported by higher international tourist arrivals, while Cresta Riley's revenue grew 25% as international leisure demand recovered. Cresta Lodge recorded 15% revenue growth, which the company attributed to increased sports tourism activity.
These gains helped push the group's gross profit margin to 34%, compared with 32% a year earlier. Cresta attributed the improvement to procurement efficiencies, stronger food and beverage margins and tighter cost management.
Costs also came down across several areas. Sales and distribution expenses fell 15%, while administrative and operating expenses declined to P47.0 million from P48.6 million. The reduction in administrative costs was partly linked to lower employee costs following the company's restructuring programme and the adoption of more efficient technology solutions.
Cresta also continued reshaping its portfolio during the period, completing its exit from Cresta Botsalo. The company said the move is intended to improve the quality of its earnings and reduce future lease obligations, while allowing it to direct capital towards higher-performing properties and growth opportunities.
Cash generation remained positive, although weaker than the previous year. Cash generated from operations fell 20% to P32.5 million from P40.7 million. The cash was used partly to repay P10.1 million in borrowings, fund P13.7 million in capital expenditure and settle P9.6 million in lease liabilities.
The company's financial position also tightened during the six months. Total assets declined 10% to P509.4 million, while shareholder equity fell 16% to P128.3 million. Cash and cash equivalents stood at P5.2 million at the end of June, down from P7.0 million a year earlier.
A significant portion of the group's capital expenditure went towards the development of the KuMuzi Boma at Cresta Mowana, which was subsequently launched on 3 August 2026 as part of the group's strategy to strengthen its leisure and tourism offering.
Looking ahead, Cresta said it will continue focusing on liquidity, operational efficiency and diversification of its customer base, with particular attention to corporate, leisure and international tourism segments. However, the company acknowledged that trading conditions remain affected by subdued domestic business travel and broader macroeconomic conditions.