December 8, 2021

Sun International reduces losses as Sun City remains a key focus for future growth

Sun International has revealed its interim outcomes for the six months ended June 2021, reporting a lack of R59 million for the interval.

Whereas that is decreased considerably from the lack of R1.4 billion skilled over the identical interval in 2020, the group’s operations stay beneath stress resulting from lockdown restrictions imposed on the tourism sector to curb the unfold of Covid-19 in South Africa.

Earnings from 2021 persevering with operations elevated by 51% from R2.5 billion to R3.8 billion, whereas adjusted headline earnings improved from a lack of R885 million within the prior comparative interval to a lack of R7 million, with an adjusted headline lack of 3 cents per share.

In South Africa, general revenue from operations improved by 52% from the prior comparative interval to R3.7 billion.

“With the easing of adjusted alert level 3 restrictions on 1 February 2021 and return to alert level 1 restrictions on 28 February 2021, income and adjusted EBITDA improved steadily throughout the period,” the group stated.

Sun International highlighted a number of key points affecting its operations over the interval:

  • The imposition of curfew hours;
  • The restrictions on the serving of alcohol;
  • Restricted capability ensuing from machines being switched off, precipitated challenges throughout peak intervals.

“Whereas the lodge trade has re-opened for home leisure and enterprise journey, buying and selling ranges stay severely muted. International journey for enterprise and leisure functions resumed on 1 October 2020, albeit with strict restrictions in place and restricted demand.

“Food and Beverage income remains well below the prior year due to the closure of certain outlets, lower occupancies and the various Covid-19 restrictions,” the group stated.

Sun International stated it has been in a position to handle prices, although this has include staff both being briefly laid off or working decreased hours. In August 2020, Sun International launched a Part 189 retrenchment course of, which finally affected 2,195 staff.

This retrenchment train impacted Sun City, The Maslow Sandton, Boardwalk, The Desk Bay Resort and the Wild Coast Sun.

The corporate has seen its worker base decline to 7,000 folks in South Africa, from 9,340 in 2019.

Additional price financial savings had been recognized in outsourcing and repair supplier contracts, IT methods, advertising and marketing, and different normal prices of roughly R309 million, it stated.

Sun City

Sun City is by far the most important contributor to Sun International’s lodge, on line casino, and resorts portfolio, ending the reporting interval within the pink.

Whereas the easing of lockdown restrictions to alert stage 1 in the course of the interval beneath evaluation elevated home leisure journey demand to the resort, the varied restrictions on inter-provincial and worldwide journey have had a vital adversarial influence on revenues, Sun International stated.

Income totalled R442 million for the interval, with adjusted EBITDA displaying a lack of R88 million. Sun City’s adjusted loss for the interval was R194 million, decreased from a lack of R251 million in the identical interval in 2020.

Regardless of this, the resort remains a key focus space, Sun International stated, with the group working alongside the North West provincial authorities to develop each the vacation spot’s amenities and the encircling areas.

In April 2021, Sun City’s administration introduced that it concluded conferences with the provincial authorities the place it laid out plans for the resort, which embrace increasing the institution with a new lodge to draw extra guests for sports activities, conferencing, arts and cultural actions or leisure, amongst others.

The group stated that its fundamental focus within the brief time period is on the restoration and growth within the home leisure and gaming market segments, and specializing in worldwide teams which journey in bigger numbers (200-plus folks) and who spend extra.

“The North West provincial government has given its full commitment to supporting our initiatives. In this regard, the government has acknowledged the need to invest in road infrastructure as well as upgrade the facilities at the Pilanesberg Airport and the Pilanesberg Nature Reserve,” it stated.

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