HomeNewsSun International Profits Rise with Online Betting and Hotels

Sun International Profits Rise with Online Betting and Hotels

Sun International, a hotel and casino group, anticipates robust profit growth for the first half of the year ending in June,

buoyed by the ongoing recovery in tourism and record revenues from its online sports betting platform, SunBet.

However, the devaluation of the Nigerian naira has somewhat tempered the company’s performance.

The group is projecting an increase in headline earnings per share by 73% to 98% for the six months ending in June, with the group having generated R231 million in this profit measure in the previous year.

On the other hand, the company expects adjusted headline earnings to rise by up to 12%, attributing this to a R39 million accounting impact stemming from dollar-denominated loans for its Nigerian operations.

SunBet has been a standout performer, achieving record income and progressing toward aggressive growth targets set for the business.

The company also noted that prudent capital management and strong cash generation helped maintain net debt at a stable level compared to 2022.

Online Betting and Hotel Performance Boost Sun International Profit

Sun International’s hotels and resorts experienced an exceptional first half, and urban casinos continued to exhibit income growth.

However, the limited payout machines business, Sun Slots, faced challenges due to power outages.

As of the end of 2022, the company’s total debt, including lease liabilities, stood at nearly R8 billion, with R700 millions of it in Nigeria.

The group also had approximately R380 million in cash reserves.

Sun International, valued at approximately R9 billion on the JSE, operates four resorts and hotels in South Africa, including the Maslow in Sandton, the Wild Coast Sun in the Eastern Cape, the Table Bay Hotel, and Sun City in the North West.

The group also operates nine urban casinos, with at least one in every province except Mpumalanga.

Nigeria’s central bank recently impacted the company’s single hotel and casino in Nigeria, the Federal Palace, through currency devaluation.

In 2022, revenue from casinos, Sun Slots, and SunBet accounted for about 80% of the company’s total revenue, with Nigeria contributing less than 2%.

Muneer Ahmed, an equity analyst at Denker Capital, emphasized that the adjusted profit measure is the key metric to monitor.

While Sun International faced challenges from load shedding affecting the slots business and a gradual recovery in urban casinos, Ahmed described the company’s performance as decent in a challenging operating environment.

He also noted the company’s progress in reducing debt over the past 18 months but highlighted the importance of further debt reduction in a high-interest rate environment.

In morning trading, Sun International’s shares rose by nearly 3% and have gained more than 20% over the past year.

Aniedi Ekwere
Aniedi Ekwere
Author/Consultant Find More Africa/AA Advisory, We provide betting reviews, thought leadership articles in the emerging markets, business development on products/ platforms in Africa with solid networking relationships with gaming operators in Africa, and Expertise in PR and marketing communication, and iGaming Consulting Services.

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