Sun City reports a good ‘health’ results despite extreme challenges faced by the Sun International group

The Johannesburg Stock Exchange listed group says, it noted that this performance was achieved despite the extremely challenging South African trading environment which saw its businesses either locked down or operating under significant and varied restrictions as a result of the Covid-19 pandemic.

During the period under review, Sun International continued to focus on ensuring the group remained in a strong position to trade through the lockdown periods and related restrictions imposed on its operations, the group said in a statement of its unaudited results for the period.

Its core casino business, which contributes about 70% of earnings, has proven its resilience and the group anticipates that it will continue to see improvements in income and adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) as restrictions are eased further and, ultimately, lifted.

Management has performed extensive work on its cost base and has realised considerable sustainable savings of R650-million in the company’s cost structure going forward.

Sun International has successfully completed Covid-19 business interruption claims for R235-million. It anticipates that the remaining claims of about R260-million will be settled shortly.

Income from continuing operations increased by 51% from R2.5-billion in the six months ended June 30, 2020, to R3.8-billion in the six months under review, while continuing adjusted Ebitda increased from R60-million to R739-million.

The Covid-19 pandemic coupled with the ongoing restrictions imposed on business and its activities will continue to have a significant impact on the South African economy, which will take some time to recover and which will impact the group’s trading results.

However, the South African vaccination programme is now gaining much-needed momentum and infection rates hopefully reducing over time, bode well for Sun International’s business, the group stated.

“We are optimistic that, with the various cost saving and efficiency initiatives implemented and a dedicated focus on improving the customer experience, the group will recover and resume delivering strong returns for shareholders.

“Our online business SunBet, as well as Sun Slots, are anticipated to continue their strong growth trajectories and are key focus areas for the group,” it added.

Sun City is by far the largest contributor to Sun International’s hotel, casino, and resorts portfolio.

While the easing of lockdown restrictions to alert level 1 during the period under review increased domestic leisure travel demand to the resort, the various restrictions on inter-provincial and international travel have had a significant adverse impact on revenues, Sun International said.

Despite this, the resort remains a key focus area, Sun International said, with the group working alongside the North West provincial government to develop both the destination’s facilities and the surrounding areas.

In April 2021, Sun City’s management announced that it concluded meetings with the provincial government where it laid out plans for the resort, which include expanding the establishment with a new hotel to attract more visitors for sports, conferencing, arts and cultural activities or leisure, among others.

The group said that its main focus in the short term is on the recovery and growth in the domestic leisure and gaming market segments, and focusing on international groups which travel in larger numbers (200-plus people) and who spend more.

“The North West provincial government has given its full commitment to supporting our initiatives. In this regard, the government has acknowledged the need to invest in road infrastructure as well as upgrade the facilities at the Pilanesberg Airport and the Pilanesberg Nature Reserve,” it said.

The company has seen its employee base decline to 7,000 people in South Africa, from 9,340 in 2019, due to Covid-19.

Meanwhile, Sun International launched its direct booking hotel reservation platform.

As part of celebrating Tourism Month, September, the new booking engine shows room availability at all Sun International hotels, and also suggests alternative dates if the ones requested are not available.

Travellers can also secure their reservations by using the simple and safe online payment process.

Graham Wood, Sun International’s Group COO for Hospitality said, “In addition to being fast, our new booking engine is also extremely easy to use. It takes just a few quick, easy steps to find and book the best rates.

Another first for Sun International is that the new booking engine also allows users to purchase accommodation vouchers to gift to others.

“Bookings aren’t limited to the person making the booking. They can also be used to purchase vouchers that will be valid for up to three years. Gift a getaway to family and friends to mark anniversaries, birthdays and other special occasions, or simply to show your appreciation to important people in your life.

A Sun International accommodation voucher is an enduring way to appreciate special people in your life,” said Wood.

Hotel vouchers are also ideal for corporates to use as part of their rewards and incentive programmes.

New sign-ups to the newsletter will receive a 10% discount.

Booking engine link:

Image (The aerial view of the majestic Sun City resort).

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