RAINBOW Tourism Group (RTG), one of Zimbabwe's leading hospitality groups, has cited the loss of an estimated US$3 million in donor-funded business and delayed government payments among key factors that put pressure on revenues during the 2025 financial year.

Presenting the group's annual report for the year ended 2025, RTG chief executive officer Tendai Madziwanyika said the trading environment remained challenging, with government austerity measures and liquidity constraints weighing on domestic demand.

"The 2025 trading environment remained challenging, as Government austerity measures and delayed settlements placed pressure on domestic demand and liquidity.

"The withdrawal of USAID funding resulted in an estimated US$3 million in forgone potential revenue while continued liquidity challenges required the group to realign input costs on an ongoing basis, notwithstanding the relative stabilization of the Zimbabwean dollar," he said.

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Madziwanyika said the group responded by intensifying its focus on foreign currency earnings, diversifying its geographical footprint and business lines, and replacing lost donor-funded business with commercial and regional demand.

"This strategy delivered tangible results, with foreign currency revenue increasing by 28% to US$24,1 million and accounting for 48% of total Group revenue compared with 43% in 2024," he said.

Despite the challenging operating environment, RTG's revenue increased 13% to US$50.3 million, supported by a 28% increase in foreign currency revenue to US$24.1 million.

Gross profit margins improved significantly to 74%, which the group attributed to stringent procurement optimisation.

Operating profit stood at US$5.4 million, while EBITDA closed at US$7.8 million.

However, the group said EBITDA and operating profit were moderated by US$1.6 million in once-off acquisition and expansion-related costs.

Net profit for the year stood at US$3.25 million, translating to basic earnings per share (EPS) of 0.13 US cents, compared with 0.22 US cents in 2024.

Total assets grew 28% to US$82.7 million, reflecting the expansion of the group's property portfolio.

During the year, RTG deployed US$15.5 million in capital expenditure as part of its inorganic growth and product modernisation strategy.

A major milestone was the US$8 million acquisition of MSK House in Cape Town, South Africa, marking the group's first regional hotel footprint.

Locally, RTG acquired Montclair Resort and Conference Centre in Nyanga for US$5 million and integrated Batoka Safaris into its Heritage Expeditions Africa (HExA) portfolio.