Hospitality sector rebound drives growth for Sagicor X Fund
Sagicor building in New Kingston

The continued rebound of the tourism and hospitality sector has led Sagicor Real Estate X Fund Limited to increase revenues to $7.1 billion during it 2022 financial year — 23 per cent above the prior year.

The company in a year-end report said that the solid performance continues to be driven by its core hotel operations benefiting from sharp increases in bookings and occupancy levels due to the easing of travel restrictions and pent-up demand for leisure and business travels.

"Sagicor X Fund's solid performance continues to be driven by its hotel operations with an uptick in bookings and occupancy levels as a result of the 'reopening' of the sector and the easing of travel restrictions. After two challenging years and restrictions with travelling, there is a demand for leisure and business travels," said Brenda-Lee Martin, chief executive officer (CEO) of Sagicor Real Estate X Fund.

For the 2022 financial year, the company's main operation Doubletree Orlando increased its profits to $566.9 million against a loss of $84.7 million in 2021. This, as the increasing demand for hotel accommodations led to occupancy levels growing 10 per cent year on year since December 2021, to close at 93 per cent in 2022 — higher than the pre-pandemic levels of 91 per cent.

Brenda-Lee Martin, CEO of Sagicor Real Estate X Fund

"The average daily rates have also increased 8 per cent above pre-pandemic rates. Earnings before Interest, tax, depreciation and amortization [EBITDA] for the period of $2 billion showed a 90 per cent growth in comparison to 2021.

"The segment's performance has been further aided by strong operational efficiencies, a result of good cost management strategies," the directors said in a report to shareholders.

"Going forward we will continue to do our best to navigate any headwinds the market might bring, but we are optimistic that business within the hospitality sector will continue on an upward trajectory," Martin also said, banking on a forecast by the US Travel Association which predicts continued strengthening of domestic travel and improvement in business travel throughout 2023.

The company, as it looks to further improve shareholder value, said that it will also continue to invest in a diversified pool of real estate assets that shows solid growth potential over the short to medium term. Sagicor X Fund maintains exposure in the local commercial real estate market through its investment in the Sigma Real Estate portfolio.

At the end of its December 31, 2022 financial year, net profit attributable to shareholders grew some 24 per cent above the previous year near totalling $466 million. The real estate company also saw additional improvements in shareholders' equity over the year, moving from $16.6 billion in 2021 to $19.10 billion in 2022 largely owing to gains on the revaluation of hotel properties and strong performance from the hotel operations. This even as total assets fell to $28.6 billion due to the wind up of its Jamziv subsidiary and the cancellation of a promissory note with the non-controlling interest holder.

At the end of last year, X fund's share price also marginally moved to at $8.67 backed by a market capitalisation of $19.45 billion.

BY JOSIMAR SCOTT Senior reporter

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