Sun International (SUI) is a casino and hotel operator with interests in South Africa, Chile, Peru, and recently Argentina. The company has been impacted by the depressed South African economy, which affected the performance of its South African casinos and hotels even before the onset of COVID-19. Despite these challenges, Sun International increased its stake in Sun Dreams in Peru by 10% to 65% and expanded its portfolio by purchasing a hotel and casino in Argentina for $25.5 million. Additionally, the company invested R4 billion in the Time Square casino near Pretoria, which was beginning to show promise before the pandemic hit.
The group also owns several well-known South African casino/hotel operations, including Sun City, Carnival City, and Grand West. The share price has fallen significantly from a high of R142 in February 2015 to current levels around R18.24. At this level, the company's debt was nearly double its market capitalization. Sun International has been working on reducing its debt, including by retrenching 2,195 staff and considering the sale of its Nigerian interests, for which it has received several offers. The company has not paid any dividends in the past two years and does not expect to resume dividend payments for another two years.
In its results for the year ended 31st December 2023, Sun International reported a 7% increase in income and an 88.1% rise in headline earnings per share (HEPS). The company noted that the South African gaming market grew for a third consecutive year to R55.8 billion in gross gaming revenue. Gaming income, which constitutes 76.8% of the group's total income, showed sustained growth, with an overall increase of 3.3%. However, casino income decreased slightly by 1.0%, and Sun Slots' operations were negatively impacted by load shedding.
In a trading statement for the six months to 30th June 2024, the company estimated that HEPS would increase by between 5.4% and 12.4%. Sunbet, the company's online gaming division, has maintained exceptional growth and is exceeding its targets. Urban casino income from larger properties has continued to grow and protect margins, while resorts and hotels have shown robust growth in income and a significant improvement in the adjusted EBITDA margin.
Technically, the share has been in an upward trend since its low point in March 2020 and is expected to continue recovering as economic conditions improve.
The group also owns several well-known South African casino/hotel operations, including Sun City, Carnival City, and Grand West. The share price has fallen significantly from a high of R142 in February 2015 to current levels around R18.24. At this level, the company's debt was nearly double its market capitalization. Sun International has been working on reducing its debt, including by retrenching 2,195 staff and considering the sale of its Nigerian interests, for which it has received several offers. The company has not paid any dividends in the past two years and does not expect to resume dividend payments for another two years.
In its results for the year ended 31st December 2023, Sun International reported a 7% increase in income and an 88.1% rise in headline earnings per share (HEPS). The company noted that the South African gaming market grew for a third consecutive year to R55.8 billion in gross gaming revenue. Gaming income, which constitutes 76.8% of the group's total income, showed sustained growth, with an overall increase of 3.3%. However, casino income decreased slightly by 1.0%, and Sun Slots' operations were negatively impacted by load shedding.
In a trading statement for the six months to 30th June 2024, the company estimated that HEPS would increase by between 5.4% and 12.4%. Sunbet, the company's online gaming division, has maintained exceptional growth and is exceeding its targets. Urban casino income from larger properties has continued to grow and protect margins, while resorts and hotels have shown robust growth in income and a significant improvement in the adjusted EBITDA margin.
Technically, the share has been in an upward trend since its low point in March 2020 and is expected to continue recovering as economic conditions improve.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.