Sun International, the giant gambling and hospitality entity, released its six months to December 31st numbers, showing a drop of 27% in net profits to R384 million.
Sun International reported that total revenue rose slightly by 4% to R5.4 billion, attributed to better conditions in the hotel trade and a 26% gain in room revenues.
However, casino numbers were a different story, and revenue remained static at R4.2 billion. This had an adverse affect on Sun International's overall numbers as casinos form the bulk of the group's revenue line.
Grand West Casino in Cape Town performed well in comparison to other properties, showing a 6% increase in revenue to R999 million, while ebitda climbed to R408 million.
The Sibaya Casino in Durban and the Boardwalk in Port Elizabeth also performed well.
The Gauteng based Carnival City, however, showed a 6% decline in revenue (10% ebitda drop) due to the competitive nature of the local market.
Plans to Fire 1,700 Sun International Workers
Sun International said that would be seeking to fire up to 1,700 workers as part of a reorganization strategy, as it continues to review its activities in South Africa and other African properties.
This move is deemed necessary due to tough trading conditions in South Africa, especially Gauteng. While interim operating profit dropped 17% to R880 million, employee costs increased to R1.25 billion (up from R1.1 billion).
Sun International Shareholder Warning
In early February, before publishing its latest numbers, Sun International issued a sobering statement to shareholders, warning of lower revenues.
"Shareholders are accordingly advised that as a consequence of ... factors, basic and headline earnings per share for the six months ended 31 December 2022 are expected to be between 18% and 22% lower than the 396 cents per share of the previous corresponding period."
"Diluted adjusted headline earnings per share is expected to be between 16% and 20% lower than the 408 cents per share of the previous corresponding period."
Sun International properties include the Boardwalk in PE, Carnival City in Gauteng, Flamingo Casino in Kimbeley, Cape Town's GrandWest, Sun City and the Wild Coast Sun in Port Edward. Beyond South Africa's borders, properties include the Livingstone in Zambia, Federal Palace in Lagos, Nigeria, the Maseru Sun in Lesotho, and the Mbabane in Swaziland.
