South Africa-based casino operator Sun International ekes out a 15 percent revenue increase for the full-year ending in June, despite incurring a R503 million (US$ 34.86 million) losses due to purchasing costs and legal settlements.
Sun’s overall revenue rose to R12 billion (US$831.56 million) in the year, thanks to its Latin American casinos, which saw its revenues surge by 40 percent to R2.45 billion (US$ 169.78 million), according to Business Day.
In June, relevant gambling regulators in Latin America has approved the merger of Sun and Chile-based gaming and entertainment firm Dream SA. Dreams portfolio includes six casinos in Chile — Iquique, Temuco, Valdivia, Puerto Varas, Coyhaique, Punta Arenas — and four in Peru, which are all in Lima.
Sun pointed out that its Chilean casinos has already bounced back from a smoking ban implemented in 2013, posting a 6.6 percent and 15 percent revenue and earnings before interest‚ tax‚ depreciation and amortization (EBITDA) growths, respectively.
Data shows that Sun’s Latin American casinos contributed to a fifth of its total revenue.
Sun’s South African casino segment is performing well as its overall revenue contribution grew 11 percent to R9.5 billion (US$658.32 million). The firm attributed the notable performance of its South African casino business to the growth of its food and beverage sales, which jumped by 67 percent to R807 million (US$55.92 million).
But Sun’s revenue growth was muted by the R675 million (US$46.78 million) settlement with Peermont. It would be recalled that the gaming and leisure giant has earlier agreed to pay Peermont some R900 million ($57.15 million) if the deal breaks down and a new complex at Menlyn Maine, in the South African capital of Pretoria, has started operations.
Meanwhile, Sun announces its plan to exit Nigeria as its casino business segment continues to struggle in the country due to a slowing economy and a dispute involving the company’s local partners.
Sun, which is part owner of the Federal Palace Hotel in Lagos, saw the EBITDA of its Nigerian operations plunge 58 percent in the 12 months through June.
“The Federal Palace continues to operate in a difficult environment with the Nigerian economy facing a number of crises including the low oil price,” the Johannesburg-based company said in the statement.
The Islamist insurgency led by the Boko Haram group and a weakening naira also hurt trading, while an “ongoing shareholder dispute has frustrated all attempts to develop and improve the property,” the company said.
