Sun International Reports Robust Earnings Growth Despite Economic Challenges

Sun International, a leading gaming and hospitality group, has announced impressive financial results for the first half of 2023. Despite operating in a challenging economic environment, the company has witnessed substantial growth in earnings and profits, primarily attributed to increased customer engagement in its gaming and hospitality businesses.

Key Financial Highlights:

1. Revenue Growth: Sun International reported a remarkable 11.7% increase in income, reaching R5.8 billion for the first half of 2023 compared to the same period in 2022.
2. SunBet’s Surge: SunBet, the group’s online betting platform, experienced exceptional growth, with income surging by 138.4% during the period. Adjusted EBITDA also saw a substantial rise, growing by 542.9% from R14 million to R90 million.
3. Strong Key Performance Indicators: SunBet achieved significant growth in key performance indicators compared to the previous year, including a 702.8% increase in unique active players, a 469.2% rise in first-time depositors, and a 216.2% growth in deposits.
4. Urban Casinos: The group’s Urban Casinos segment witnessed a 4.2% increase in income, with an adjusted EBITDA of R1.1 billion.
5. Resorts and Hotels: Income from resorts and hotels grew by 26.9%, reaching R1.4 billion, while Adjusted EBITDA increased by 64.4% to R314 million, up from R191 million in H1 2022.
6. Exceptional Performance at Sun City: Sun City, following operational restructuring, demonstrated exceptional performance, especially in catering to the South African market. The Table Bay Hotel experienced robust growth in both occupancies and room rates, driven by strong demand from international markets.

Challenges in Sun Slots Business

Despite overall growth, Sun Slots’ income declined slightly from R730 million to R717 million, with adjusted EBITDA decreasing from R191 million to R166 million. Load shedding, a major contributing factor, negatively impacted this business, resulting in decreased gameplay and footfall at Sun Slots’ sites.

Sustainable Energy Initiatives

To mitigate the effects of load shedding, Sun International is implementing a blended energy system, incorporating photovoltaic solar, battery solutions, green energy from independent power producers (IPPs), and Eskom/Municipal power. The company has already installed a R17 million solar plant, reducing electricity consumption and freeing up 14% of the hotel’s electrical demand from Eskom. Additional renewable energy projects are in progress at Sibaya and Carnival City.

Dividend Increase

Sun International has raised its interim dividend from 88 cents in H1 2022 to 148 cents in H1 2023, reflecting its confidence in its financial performance and growth prospects.

Sun International’s impressive financial results underscore its resilience and adaptability in the face of economic challenges. The company’s strategic focus on online betting, urban casinos, resorts, and sustainable energy initiatives has contributed to its strong performance in a competitive market environment.