Dip in spending stings Sun International

Posted On Friday, 29 August 2008 02:00 Published by
Rate this item
(0 votes)
Attributable profit is down 42% to R457m as economic slowdown curbs hotel and gaming group's earnings growth.

Julius Baumann

Aviation and Tourism Editor

HOTEL and gaming group Sun International reported attributable profit down 42% to R457m as slowing consumer spending curbed earnings growth in the year to June.

The group posted revenue up 10% to R7,6bn, with gaming revenue rising 9% to R5,8bn.

Slot and table revenues were up 9% and 12% respectively.

Grandwest, by far the group’s largest revenue generator, achieved revenue growth of 10% at R1,7bn.

However, margins came under pressure due to the expanded casino and entertainment facilities as well as higher casino levies.

Carnival City also had a challenging year, with the opening of Gauteng’s seventh casino, Gold Reef’s Silverstar Casino, last year providing competition.

Rooms revenue fared slightly better, climbing 14% to R881m. Average occupancies across the group’s hotels and resorts were up two percentage points to 76% and the group achieved an average room rate of R850, up 7% on last year.

Sun City, the group’s second biggest revenue earner, pushed occupancy rates up five percentage points to 84% and improved average room rates 10% to R1157.

CEO David Coutts-Trotter said yesterday while casino revenue would remain under pressure, a relatively buoyant international tourism market would aid hotel revenue in the year ahead.

“SA remains a relatively popular destination. We sell and market our hotels and resorts aggressively internationally and are well represented in several big developing countries,” Coutts-Trotter said.

Total capital expenditure for the year was R861m. Construction of the Monticello casino project in Santiago, Chile, will start next month and the retail and entertainment elements will open in December.

The construction of a 150 room hotel is expected to be completed in May. The group said the cost of the project had risen to $236m due to the strengthening of the Chilean peso against the US dollar.

In Nigeria the refurbished Federal Palace Hotel on Lagos’s Victoria Island was opened at the beginning of the month.

In SA, the R450m Grandwest expansion was completed in the first half of the year and second phase of Sun City Main Hotel refurbishment is expected to be wrapped by November.

A final dividend of 258c a share was declared, bringing the total dividend a share for the year to 480c.

Source: Business Day

Publisher: I-Net Bridge
Source: I-Net Bridge

Most Popular

Investec Property Fund launches first REIT sustainability-linked ESG bond in Africa

Apr 22, 2021
Investec Property Fund (‘IPF’ or ‘the Fund’) today became the first South African real…

Rethinking office space in post pandemic SA

Apr 20, 2021
Since the beginning of the pandemic, one of the biggest questions in real estate has been…

4 simple rules to getting a good credit score

Apr 21, 2021
Make buying your dream home an informed purchase by knowing your credit score.

EPP’s new app takes tenant relations to the next level

Apr 22, 2021
Johannesburg Stock Exchange listed EPP, Poland’s biggest retail landlord, continues to…

Western Cape ripe with affordable housing potential

Apr 20, 2021
The TUHF Western Cape regional team believes that even though COVID has had an impact on…

Please publish modules in offcanvas position.