Sun International Reports R60 Million Loss in Six Months Interim Results

The South African casino & hospitality group, Sun International published its interim results for the six months this year.

Sun International reported a R59 million loss for the period, although the company was pleased with the reduced loss seen compared to the same period in 2020 when it reported on a R1.4 billion loss. This was due to the strict lockdown restrictions imposed on businesses in South Africa. The country’s casino and hospitality industries took the brunt of the lockdown, and still remain under pressure due to continued restrictions.A number of factors impacted Sun International’s earnings in the six-month, including new curfew hours imposed by the government, alcohol sales restrictions and capacity limitations.

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Highlights of Sun International Interim Report

• Income from continuing operations this year grew by 51% from R2.5 billion to R3.8 billion.
• Adjusted headline earnings improved from a year-on-year los of R884 million to a loss of R7 million.
• Overall income from operations in South Africa improved by 52%

 

What Sun International has to Say

Sun International said in the interim report: “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.”

“While the hotel industry has re-opened for domestic leisure and business travel, trading levels remain severely muted. International travel for business and leisure purposes resumed on 1 October 2020, albeit with strict restrictions in place and limited 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.”

Retrenchments in Casino Industry

Although Sun International was able to manage its costs, this came at a heavy price for just over 2,000 employees who were temporarily laid off or forced to reduce their working hours. The affected workforce came from the group’s Sun City, The Maslow Sandton, Boardwalk, The Table Bay Hotel and Wild Coast Sun properties. Sun International’s South African properties employed 9,340 people in 2019, but that number has slipped to 7,000 today.

Plans for Sun City

As one of the largest contributors to Sun International’s revenue, its flagship property, Sun City received a lot of focus in the report.

But Sun City was not immune to the effects of the pandemic either and still reported an adjusted loss of R194 million in the six-month interim report. This, however, was an improvement from the R251 million loss reported in the same period in 2020.

Nevertheless, Sun International has major plans in the pipeline for Sun City, and the group has already started working with the North West provincial government to develop the property’s facilities and surrounding areas. Sun International hopes to build a new hotel so as to attract new visitors to the area. It believes that this will contribute to the recovery and growth of the regions and encourage international visitors.

“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,” read the report.