Sun International cuts losses in H1 2021 as revenue increases

| By Conor Mulheir
Results published for the first half of 2021 by South African casino operator Sun International show that revenue was up 51.5% year-on-year for the six months ended 30 June, at ZAR3.76bn (£190.1m/€221.2m/$262.1m).

The figures are still down significantly on the operator’s H1 2019 results, prior to the novel coronavirus (Covid-19) pandemic, during which time the business brought in revenue of ZAR5.54bn.

The majority (ZAR2.33bn) of the company’s income for H1 2021 came from its casino operations, which tracked 52.7% ahead of the figure recorded for the segment in H1 2020.

Alternate gaming, comprising the operator’s Sun Slots retail and SunBet online brands, was the next biggest earner for the business, bringing in ZAR699m, up 97.5% on H1 2020.

Resorts and hospitality brought in ZAR690m of H1 revenue, up 20.8% from the ZAR571m recorded in 2020.

These revenue streams left the business with adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of ZAR739m, compared to EBITDA of just ZAR60m from its continuing operations in H1 2020. This was still down significantly on H1 2019, during which Sun recorded EBITDA of ZAR1.49bn.

Across all segments, the operator generated ZAR288m in operating profit. After losing ZAR6m on foreign exchange rates and paying ZAR233m in interest charges, it was left with an adjusted profit before tax of ZAR49m.

After paying tax of ZAR32m, its adjusted profit after tax was ZAR17m, but after losing ZAR22m in minority interest in a separate business, the operator was left with an attributable loss of ZAR5m, which after a ZAR1m contribution from the share of associates, left it with a continuing group adjusted headline loss of ZAR4m.

This represents a significant improvement over H1 2020, when the business posted a headline loss of ZAR703m, but still tracks well behind H1 2019, when it recorded headline earnings of ZAR68m.

Although Sun International did not detail its operating costs, it said these had been reduced in an effort to preserve the business’ liquidity, including measures such as a reduction of up to 60% in payroll costs and the deferral of all capital investment other than critical spend.

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