Sun International earnings take a dive
Johannesburg - Hotel and gaming group Sun International Limited [JSE:SUI] on Monday announced diluted headline earnings per share of 456 cents for the year ended June 2011, from 555c previously
It noted diluted earnings per share of 456c, from 539c in 2010.
Revenue for the year increased by 12% to R8.9bn, while operating profit declined a tad to R1.61bn, from R1.63bn.
Rooms revenue increased by 5% while food, beverage and other revenues rose by 13%.
The board declared a final dividend of 120c/share.
Earnings before interest, tax, depreciation and amortisation (Ebitda) of R2.6bn was 1% above last year, while the Ebitda margin declined 3% to 29%.
"Our South African customers continued to feel the economic pressures; however, in general average visits and spend per customer were marginally up," Sun International said of its gaming business.
"Demand for hotel accommodation remained weak globally as well as in SA, particularly in the luxury end of the market where the group is predominantly positioned.
"In the light of this, the group's performance was reasonable with rooms revenue of R904m, up 5% from last year in part due to the full year's trading of Federal Palace," the group said.
Overall group occupancy was down 1% at 66% and the average room rate of R912 was just 2% ahead of last year, Sun International said.
It said that the second phase of the Wild Coast refurbishment project, completed in December 2010, took the total complement of refurbished rooms to 111.
The third phase commenced in January, comprising not only the refurbishment of an additional 182 bedrooms, the convention centre (already completed) and main kitchen, but also the construction of a world class water park.
The total estimated capital expenditure remains at R400m with final completion scheduled for mid-2012.
For Kalahari Sands, the refurbishment of 173 hotel rooms, the buffet restaurant, kitchen and back of house areas was completed during the year. The estimated capital expenditure remained unchanged at R89m.
With the awarding of a further exclusive gaming licence for 15 years, the expansion of the facilities at Boardwalk commenced in November 2010. The construction of the 870-bay parkade, new conference centre and 135-room five star hotel was under way and the estimated completion date was for December 2012.
Looking ahead, Sun International said: "The economic environment impacting the group remains generally negative globally and in SA, hence hospitality and gaming revenues are only expected to improve marginally in the year ahead. Monticello and the Federal Palace are forecast to continue to increase their contribution to the group's results.
"Margins are likely to stabilise and growth in adjusted headline earnings per share is consequently anticipated for the year ahead. The group is actively pursuing further growth opportunities in its current markets and other emerging markets," it said.