Sun International reveals 5.5% income increase for 2023

Total income for the 12 months to 31 December 2023 was 7.0% higher than ZAR11.3m in the previous year. Sun International said the results reflect the “resilience” of its omnichannel portfolio and “disciplined” execution strategy.

Looking across the business, there are mixed results for Sun International. While income was higher in some segments, this was not the case for other areas of the group. Stand-out highlights include a record performance by SunBet and a 14.8% hike in income from its Sun City casino.

In contrast, there were declines across several of its casino properties, with slots operations having been impacted by “load shedding”.

However, it was a good year for the group, which in December expanded its portfolio with the acquisition of Peermont. The deal, which includes the flagship Emperors Palace resort and online brand PalaceBet, is worth ZAR7.30bn. Sun says the purchase may close before the end of the year.

“The performance reflects the quality of its operating businesses, the resilience of its omnichannel portfolio and disciplined execution on strategy which continues to drive shareholder value,” Sun said.

“We are executing effectively on our omnichannel strategy and are focused on extracting further operational efficiencies as we look to protect and grow our income and margins.”

Positive signs for Sun International in 2024

The group added that while the wider economy and load shedding is placing pressure on its urban casinos, trading levels at the start of 2024 have improved. Again, it noted the success of SunBet.

“Our limited pay-out machines operations are demonstrating continued resilience,” Sun said. “SunBet is achieving significant income growth and is exceeding key performance indicators. This strong momentum is expected to continue with another substantial increase this year as the business expands rapidly. 

“Our resort and hotel properties have continued to perform exceptionally well and we anticipate another good year from them in 2024. Overall, we are seeing positive growth in both income and adjusted EBITDA.”

Sports betting and tables growth offsets slots decline

Breaking down the 2023 results, gaming was the main source of income at ZAR9.29bn, up 3.2%. 

Slots remained the main source of income at ZAR5.51bn, but this was 2.8% lower than the previous year. However, tables income was up 5.9% to ZAR1.59bm and income from the Sun Slots and SunBet brands also jumped 1.9% to ZAR2.19bn.

As for other revenue from non-gaming operations, this increased 21.7% to ZAR2.81bn. Sun said rooms revenue was up 32.6% to ZAR1.13bn, food and beverage revenue 14.9% to ZAR986m and other revenue 13.7% to ZAR591m.

In terms of individual operations, GrandWest casino drew the most income at ZAR1.88bn, a 3.0% increase. Sun City followed on ZAR1.87bn then Sun Time Square at ZAR1.51bn.

Other stand-out figures for Sun include the record ZAR733m generated by SunBet. The Sun Slots brand also had a good year with ZAR1.47bn in income, although this was 2.7% down from 2022’s total.

Net profit up 62.1% in 2023

Turning to spending, costs were higher across several areas for Sun. The main outgoing for 2023 was employee expenses at ZAR2.31bn, up 7.6% year-on-year. Levies and VAT on casino income also increased 2.6% to ZAR2.20bn.

However, this did not stop Sun posting an improved operating profit, with this rising 2.5% to ZAR2.50bn for the year. Even after including other, finance-related costs, pre-tax profit was 29.4% higher at ZAR1.77bn.

Sun paid ZAR555m in total tax and also accounted for ZAR79m in negative foreign currency translation and ZAR22m related to fair value on listed shares. As such, this resulted in a total comprehensive net profit of ZAR1.30bn for 2023, up 62.1% from the previous year.

In addition, group adjusted EBITDA for the year was 2.4% higher at ZAR3.40bn.

“Our balance sheet remains strong and positions us to continue delivering industry-leading cash returns to shareholders,” Sun said. “While we anticipate that the proposed acquisition of Peermont may be concluded this year, we do not expect it to have a significant impact on our 2024 financial performance. 

“In the meantime, we will be focused on comprehensive integration planning and positioning the combined group to deliver earnings and cash flow accretion with comfortable levels of gearing immediately post completion.

“Leveraging off our current momentum and proven leadership, we are confident our strategy will continue to yield exceptional results.”