On March 18, South Africa’s Sun International reported an income growth of 4% in 2019. This helped the company make progress in reducing its debt to R8.8 billion ($510 million) from R9.2 billion ($530.2 million), according to a company presentation.
The success was driven in part by an 82% increase in the income of SunBet, the company’s online sports betting operation. That vertical posted earnings before interest, taxes, depreciation, and amortization (EBITDA) of R44 million ($2.6 million). Overall, the company’s adjusted earnings increased by 109% to a total of R763 million ($45.97 million).
CEO Anthony Leeming said the company is pleased by their results:
“We are pleased with the progress we have made against these goals that have assisted us in achieving extremely pleasing results against the backdrop of an increasingly challenging environment. We were particularly pleased with our LatAm operations which showed resilience in the face of unexpected and widespread social unrest in Chile during the last quarter. Sun Dreams also demonstrated pleasing de-gearing and balance sheet strength.”
While overall debt reduction was achieved, they also were able to pay additional interest on their Sibaya Casino, located in Durban, South Africa. They refinanced their debt in South Africa during the year, successfully completing a 50% oversubscription.
In South Africa, total income increased by 2% to a total of R11.5 billion ($670 million). LatAm operations reported a 1% increase despite widespread civil unrest in Chile and a poor economic climate in Argentina.
“Chile and Peru are forecasting positive GDP growth, which augurs well for our operations. A number of countries in Latam are looking to regulate online gaming, and this too represents a good opportunity for us to grow,” explained the CEO. “While it is still too early to forecast what impact the Coronavirus might have, we are taking all necessary precautions to ensure a safe and healthy environment for our guests and staff and preparing operations for any possible disruption to trading.”
While sports betting revenue is up, the hotel operations of Sun International have seen declining profits. The company had kept its hotels open during the COVID-19 pandemic, but are changing their policies due to reported cases in Latin America.
