TPS Eastern Africa, the company behind Serena Hotels, has cautioned investors that its full-year profit will drop by more than 25 percent. Last year’s results were propped up by hefty non-cash foreign-exchange gains that will not be repeated, while softer regional security and renewed travel advisories have slowed bookings across its East African properties.
The warning comes after a bruising first half of 2025, where TPS swung from a KSh 696 million profit to a KSh 16 million net loss for the six months to June. Revenue fell 11 percent to KSh 4.05 billion as occupancy and margins took a hit from public protests in Kenya, inflationary pressure and wider geopolitical jitters. Profit before depreciation, finance costs and tax slid to KSh 540 million from KSh 756 million.
The main drag on performance is the absence of the extraordinary FX gains that inflated the 2024 figures. Last year, TPS booked KSh 879 million in finance income and recorded a KSh 1.4 billion turnaround in net foreign-exchange movements, pushing profit after tax to KSh 1.317 billion. Although operating cash flow remained sound, actual earnings were flattered by the upward revaluation of US dollar loans and lease liabilities. With exchange rates relatively stable this year, those paper gains have vanished.
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The half-year accounts underline how steep the downturn has been. TPS posted a KSh 17.7 million FX loss, compared with a KSh 762 million gain over the same period in 2024. Profit before FX and tax fell sharply to KSh 16.5 million from KSh 239.9 million, signalling pressure on the underlying business even before currency effects. Management added that IFRS 9 provisions had to be raised after revising forecasts to reflect the tougher economic climate.
Security concerns across parts of the region have compounded the strain. Travel warnings and cancellations have weakened Serena’s leisure pipeline in Kenya and beyond, hurting the high-yield segments that usually anchor second-half performance. Translation losses of KSh 99 million in the period also reflected currency weakness in some of the group’s markets.
