Sun International’s earnings fall as core market struggles
by Staff Writer,
2016-02-22 10:03:50.0
THE constrained economic conditions in SA have negatively affected gaming and hospitality group Sun International’s earnings.
In the six months to December 31 2015, Sun International reported a 19% decline in diluted adjusted headline earnings per share (HEPS) to 332c compared with the year-earlier period.
CE Graeme Stephens said this was largely due to the slowdown in the company’s home market of SA.
"The core South African operations of the group still contribute 80% of revenue and the prevailing economic conditions in the country resulted in extremely low casino revenue growth, which was well below the level of cost escalation.
"This was partially offset by the continued growth of Monticello in Chile, where the positive earnings growth was also amplified by the strengthening of the peso against the rand," Mr Stephens said.
Revenue, on the other hand, grew 10.3% to R5.8bn boosted by in-sourced food and beverages as well as new properties that were opened, the company said.
The board declared a gross interim dividend of 90c per share, a little less than the 110c in the year-earlier period.
Mr Stephens said the group could benefit from the weaker rand.
"We expect the hotel side to continue to do well given the weak currency and the changes being made to visa requirements for foreign travellers."
Picture: THINKSTOCK
THE constrained economic conditions in SA have negatively affected gaming and hospitality group Sun International’s earnings.
In the six months to December 31 2015, Sun International reported a 19% decline in diluted adjusted headline earnings per share (HEPS) to 332c compared with the year-earlier period.
CE Graeme Stephens said this was largely due to the slowdown in the company’s home market of SA.
"The core South African operations of the group still contribute 80% of revenue and the prevailing economic conditions in the country resulted in extremely low casino revenue growth, which was well below the level of cost escalation.
"This was partially offset by the continued growth of Monticello in Chile, where the positive earnings growth was also amplified by the strengthening of the peso against the rand," Mr Stephens said.
Revenue, on the other hand, grew 10.3% to R5.8bn boosted by in-sourced food and beverages as well as new properties that were opened, the company said.
The board declared a gross interim dividend of 90c per share, a little less than the 110c in the year-earlier period.
Mr Stephens said the group could benefit from the weaker rand.
"We expect the hotel side to continue to do well given the weak currency and the changes being made to visa requirements for foreign travellers."
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