Sun International, a prominent operator in the leisure and gaming industry, has reported substantial growth in its financial performance for the six months ending on June 30th. Despite operating in a challenging economic environment with increased competition, the company’s total income surged by 11.6% to reach ZAR 5.78 billion (£243.7 million/€284.5 million/$305.3 million). This growth was driven by exceptional performance in its resorts and hotels segment and solid contributions from urban casinos.
Segmental Breakdown:
Resorts and Hotels: Sun International’s resorts and hotels segment experienced remarkable growth, with income surging by 26.9% to ZAR 1.42 billion. The company noted a strong recovery in this sector, driven by increasing domestic leisure, conferencing, and sports and events revenues. International leisure business also showed significant improvement during the review period.
Urban Casinos: The nine urban casinos operated by Sun International generated substantial income, totaling ZAR 3.27 billion, marking a 4.2% increase. Casino income accounted for 91.8% of this total, rising by 2.2% to ZAR 3.00 billion.
Financial Highlights:
Adjusted Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA) for the period reached ZAR 1.57 billion, reflecting a 5.6% increase compared to H1 2022.
Key contributors to income included GrandWest (ZAR 891 million), Time Square (ZAR 724 million), and Sibaya (ZAR 634 million).
Sun Slots, the company’s slot machine division, contributed ZAR 717 million to income, while SunBet, the sportsbook brand, witnessed a remarkable 138.3% year-on-year income growth, reaching ZAR 298 million.
The total income from South Africa alone grew by 11.5% to ZAR 5.71 billion, while income from Nigeria and other regions increased by 20.0% to ZAR 72 million.
Operational Metrics:
Sun International reported substantial growth in its active player base, with a 702.8% increase. Additionally, first-time depositors grew by 469.2% during the period.
Net gaming win for the six months rose by 6.5% to ZAR 4.51 billion.
Operating costs included employee costs (ZAR 1.17 billion, up by 13.8%), levies, and VAT on casino income (ZAR 1.06 billion), as well as consumables and services costs (ZAR 651 million).
The operating profit for the half-year reached ZAR 1.13 billion, reflecting a growth of 9.2%.
After accounting for other costs and finance expenses, the profit before tax amounted to ZAR 722 million, representing a 21.3% increase.
The overall profit for the half-year, after considering taxation, reached ZAR 485 million, indicating a significant growth of 41.0%.
Outlook and Strategy:
Looking ahead to the second half of the year, Sun International anticipates continued operational improvement despite the challenging economic conditions in South Africa. The company emphasizes its strong momentum and effective leadership in place to deliver the desired results.
Sun International’s robust financial performance in the first half of the year underscores its resilience and strategic positioning in the leisure and gaming industry. The company’s ability to navigate economic challenges and achieve substantial growth reflects its commitment to delivering value to its stakeholders.