| Tue 4 Nov 2008, 12:00 | | SUI - Sun International Limited - Business Update for the quarter to 30 |
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SUI
SUI
SUI - Sun International Limited - Business Update for the quarter to 30
September 2008
Sun International Limited
(Incorporated in the Republic of South Africa)
(Registration number 1967/007528/06)
Share code: SUI & ISIN: ZAE000097580
Business update for the quarter ended to 30 September 2008
Trading
The group has, in the first quarter, achieved overall revenue growth of 3% over
last year which is reflective of the current economic environment. Casino and
rooms revenues were 1% and 13% ahead of last year respectively, while food,
beverage and other was up 8%.
At the casino operations, Carnival City, Meropa and Morula performed well,
achieving revenue growth of 7%, 10% and 11% respectively. Following the opening
of the lodge at Golden Valley, the unit had an excellent quarter with revenue
up 42% on last year. GrandWest and Boardwalk experienced negative growth of 6%
and 4% respectively, while Sibaya`s revenue was in line with the prior period.
Amongst the hotels and resorts, the Table Bay and Zambian properties achieved
excellent results, with revenue growth of 25% and 23% respectively. Sun City
achieved a modest revenue growth of 2% due to the high base in the prior year
resulting from higher group convention bookings. The average room occupancy for
the quarter at 76% was 2 percentage points down on the previous year.
The overall EBITDA margin of 33,5% is 1,5% lower than the comparative quarter
last year, mainly due to the lower revenue performances from the major casino
properties. However, given the pressures on costs due to the current
inflationary environment, this is a satisfactory achievement.
Quarter to September
2008 Change 2007
Rm % Rm
Revenue 1 3 1
861 803
Casino 1 1 1
445 426
Rooms 210 13 186
Food, beverage and other 206 8 191
EBITDA 623 (1) 631
EBITDA margin (%) 33,5 35,0
Developments
The second phase of the Sun City Main Hotel refurbishment comprising 170 rooms
and certain back of house areas is progressing well and is due for completion
this month.
Eastern Cape casino licences
The Wild Coast Sun`s casino licence expires in August 2009. The group has
submitted its application for a new licence at the Wild Coast Sun, which
includes a R340 million upgrade and expansion of the resort, and is awaiting the
announcement of the successful bidder from the Eastern Cape Gambling and Betting
Board (ECGBB).
The Boardwalk`s licence expires in October 2010. The Final Request for Proposal
(RFP) has been issued and contains a number of substantial changes to the draft
RFP. These include the extension of the proposed licence period from 10 to 15
years and the elimination of the R750 million minimum investment requirement.
Submissions for this licence are due on 13th January 2009 and the announcement
of the preferred bidder is scheduled for June 2009.
Chile
The Monticello casino, located to the south of Santiago in Chile, opened on 8
October 2008 as planned. Despite this only being a "soft opening" the number of
visitors to date is very pleasing and the sign ups to the group`s MVG casino
loyalty programme are encouraging. The important West access road and further
parking is still under construction and therefore the casino will not trade at
full capacity for the ensuing three to four months. The retail and entertainment
elements will open around March 2009 and the 155 room hotel in June 2009. The
project is within the overall cost of US$236 million previously advised.
Nigeria
The group is currently managing the Federal Palace Towers Hotel on Victoria
Island, Lagos, and the refurbished 150 room Federal Palace Hotel was officially
opened on 1 August 2008. The gaming licence is expected to be issued shortly,
following which the group will acquire a 49,5% equity interest in the business
for US$38 million. The development of the temporary casino will commence shortly
thereafter and is anticipated to open by end March 2009, where after the Federal
Palace Towers hotel will be closed for renovation. The total expected cost of
the project remains unaltered at $167 million.
Outlook
Trading in the group`s casinos in South Africa for the remainder of the first
half is expected to remain challenging as a result of the difficult economic
climate. However this will be offset to some extent by the stronger growth in
hospitality revenues.
4 November 2008
Sponsor: Investec Bank Limited
Date: 04/11/2008 12:00:01 Produced by the JSE SENS Department.
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