DURBAN - SUN INTERNATIONAL expects to fall into an annual loss after the hotel, resort, casino and gaming group experienced a lengthy closure of many of its operations as a result of the Covid-19 outbreak.
In a trading update released yesterday, the group said that it expected to report a headline loss of between 170 cents and 290c a share for the year to the end of December compared with headline earnings per share of 603c reported a year earlier.
“The Covid-19 pandemic significantly impacted the group’s results for the year to end December 2020, following the prolonged closure of many of its operations during the year as a result of the lockdowns imposed by the government in terms of the Disaster Management Act,” the group said.
It also expected to report a loss of between 1 000c and 1 100c compared with basic earnings per share of 518c last year. Adjusted headline earnings per share were expected to reflect a loss of between 570c and 690c compared with a profit of 605c reported a year earlier.
The difference between basic earnings per share and adjusted headline earnings per share related primarily to an impairment charge of about R1.3 billion before tax and minority interests.
“The charge was against the carrying values of certain South African cash-generating units like Sun City, Boardwalk and Maslow Sandton, as well as certain intangible assets from the South African and Sun Dreams operations as a result of the Covid-19 pandemic and the associated impact on trading conditions,” Sun International said.
In terms of International Financial Reporting Standards 5.15 to 15A, the carrying value of the company’s investment in Sun Dreams was remeasured to fair value less cost to sell, resulting in an impairment of the carrying value of R612 million.
Sun International sold its 64.94 percent stake in Latin American operation Sun Dreams for $160m (R2.45bn) and settled the dispute with its partner, Nueva Inversiones Pacifico Sur, in August. The group also experienced a nonrecurring restructuring and related costs of R204m and a decrease in the value of the Tsogo Sun put option of R1bn.
In November last year, Sun International reported that its South African operations were on the mend after they were severely curtailed by the trading restrictions placed by governments following the Covid-19 outbreak.
Sun International achieved 73 percent of last year’s income for the month of October, while in July the group achieved 33 percent of total income for the same period last year. It expects to release its full-year results on March 15.
Sun International shares fell 3.55 percent to close at R14.95 yesterday.
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