Tourist Company of Nigeria Plc, owner of Federal Palace Hotel, reports a staggering N31.6 billion loss in 2023, wiping out shareholder funds. Foreign exchange losses, legal disputes over loans, and rising operating costs contributed to the financial turmoil. The company, majority-owned by Sun International, faces significant challenges in the hospitality sector.
Tourist Company of Nigeria Plc, the owners of Federal Palace Hotel, faced substantial financial setbacks in 2023, reporting a staggering pre-tax loss of N31.6 billion compared to N3.2 billion in 2022. This drastic increase in losses eroded the company's shareholder funds, resulting in negative equity amounting to N7.8 billion.
The losses were exacerbated by significant foreign exchange losses totaling N30.3 billion, primarily attributed to foreign currency loans amounting to $67.7 million owed to related entities like Ikeja Hotel, Sun Hotel, and Omamo Investment Ltd. Despite a 7% revenue increase to N4.26 billion, operating costs soared by 21%, leading to an operating loss of N1.4 billion.
The company's hospitality sector saw revenue growth, but its casino revenue declined by 18%, reflecting broader challenges in the sector. Power and fuel costs also rose by 8%, contributing further to financial strain amidst ongoing legal disputes over loans. Tourist Company of Nigeria Plc, majority-owned by South Africa's Sun International, faces a daunting path to financial recovery amidst mounting debts and operational challenges.
