Sun International takes hit from load shedding, but sees domestic recovery | Business


The Palace at Sun City Resort.

The Palace at Sun City Resort.

Load shedding is impacting the costs of hotels and gaming group Sun International, with diesel expense incurred between R12 million and R14 million a month. 

The group is exploring options around a comprehensive energy plan, it said on Monday when releasing its results for the year ending December 2022. Group income for the year was up 44% from the prior year to R11.3 billion. 

Sustainable cost savings contributed to its South African business’s adjusted earnings before interest, taxation, depreciation and amortization (ebitda) growing by 96% to R3.3 billion.

Without the impact of the net diesel costs of R53 million, due to load shedding, the group would have achieved its targeted 30% adjusted ebitda margin.

Adjusted headline earnings improved from R110 million to earnings of R1.1 billion with adjusted headline earnings of 439 cents per share up from 44 cents per share, in the prior year.

The board has declared a final gross cash dividend of 241 cents per share. Gaming income from casinos, Sun Slots and SunBet make up 80% of group income.

The group was able to grow market share in all provinces, while income generated from Sun Slots recovered to pre-Covid-19 levels.

SunBet generated record income during the year under review. Sun International has concluded a 70% investment in SunBet Africa Holdings for R52.4 million.

This company has online sports betting and casino licences to operate in Ghana, Zambia and Kenya and Sun International is in the early stages of rolling out the SunBet operating model and brand in these markets, where it sees long-term growth potential.

As for resorts and hotels, total revenue was up 65% on the prior year, to R2.5 billion. Following a difficult start to the financial year with the closure of borders due to the Omicron Covid-19 variant, this sector has started to recover. Domestic leisure, conferencing, sports and events revenues exceeded 2019 levels while international leisure business recovered strongly in the second half of the financial year.

Sun International’s shares rose 4.11% in early trade on Monday to R34.45 and are up 46% on a one-year basis. Click here for details on Sun Internationals shares as well as other info.

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