Sun International sees light at the end of the Covid-19 tunnel
DURBAN – Sun International said on Tuesday that it was on the mend after its operations were severely curtailed by the trading restrictions placed by governments following the Covid-19 outbreak, with its South African operations at the centre of its recovery.
The group said South African casino operations resumed trading from the beginning of July after the easing of the lockdown measures, but its Latin America operations remain under a hard lockdown and have been unable to trade since March while the Federal Palace Hotel in Nigeria had only recently reopened and had shown a muted recovery.
Last month, Sun International achieved 73 percent of last year’s total income for the same month, while in July the group achieved 33 percent of total income compared to the same period last year.
“All the company’s South African operations have reopened, with Sun City having re-commenced trading in September once the restrictions on interprovincial travel were lifted and the Maslow Sandton and Table Bay hotels having resumed operating in October and November, respectively,” the group said.
Sun International operates in the hotel, resort, casino and gaming industry.
However, the group said the effect of Covid-19 continued to impact trading due to reduced capacity and despite South African operations showing some recovery.
“In the face of the current pervasive challenges, Sun International has responded proactively to protect its business in the short term and positioned the group for sustainable recovery over the long term,” the group said.
Sun International’s October casino income improved to 76 percent of last year’s October casino income, while July’s figure was only 36 percent of last year’s casino income.
The group’s gaming operations Sun Slots and Sun Bet were the strongest performers last month. In October, Sun Slots achieved 101 percent of revenue compared to the same month last year while Sun Bet achieved 122 percent of revenue compared to the same month of October last year.
The group managed to cut its South African debt to R8.5 billion at the end of September, down from R9.6bn at the end of June.
Sun International agreed to sell its 64.94 percent majority stake in Latin American operation Sun Dreams for $160 million (R2.47bn) and settled the dispute with its partner, Nueva Inversiones Pacifico Sur in August.
The group also raised R1.2bn through a rights offer.
The proceeds from the disposal of Sun Dreams is expected to strengthen its liquidity position and its balance sheet.
Sun International shares closed 0.38 percent higher at R13.35 on the JSE on Tuesday.