Sun International (SUI) is a casino and hotel operator with interests in South Africa, Chile, Peru, and recently, Argentina. The depressed economy in South Africa impacted the performance of South African casinos and hotels even before COVID-19.
The company increased its stake in Sun Dreams in Peru by 10% to 65%. It also bought a hotel and casino in Argentina for $25,5m. The company invested R4bn in the Time Square casino near Pretoria, which was beginning to perform before COVID-19. The group also owns well-known South African casino/hotel operations like Sun City, Carnival City, and Grand West.
The share has fallen from a high of R142 in February 2015 to current levels around R18.24. At this level, its debt was close to double its market capitalisation. The company plans to sell its Nigerian interests and has received a number of offers. It has not paid any dividends in the past two years and only expects to resume dividends in a further two years or so. The company retrenched 2195 staff and its debt fell sharply.
In its results for the six months to 30th June 2024, the company reported income up 5% and adjusted headline earnings per share (HEPS) up 9,1%. The company said, "The group's 5.0% increase in income, combined with effective cost control, yielded a continuing adjusted EBITDA margin of 27.3% which was in line with the prior period. This consistency highlights the effectiveness of cost optimisation initiatives implemented by the group and lower diesel costs following the reduction in load shedding. The group is in a strong financial position with South African debt (excluding IFRS 16 lease liabilities) at R5.4 billion."
In a trading statement for the year to 31st December 2024, the company estimated that HEPS would increase by between 14,1% and 19,8%. The company said, "Sun International retains a strong financial position as it continues to de-gear, with debt (excluding IFRS 16 lease liabilities) decreasing from R5.7 billion in FY23 to R5.2 billion as at 31 December 2024."
Technically, the share has been in a volatile upward trend since its low point in May 2020. It should continue to recover.
The company increased its stake in Sun Dreams in Peru by 10% to 65%. It also bought a hotel and casino in Argentina for $25,5m. The company invested R4bn in the Time Square casino near Pretoria, which was beginning to perform before COVID-19. The group also owns well-known South African casino/hotel operations like Sun City, Carnival City, and Grand West.
The share has fallen from a high of R142 in February 2015 to current levels around R18.24. At this level, its debt was close to double its market capitalisation. The company plans to sell its Nigerian interests and has received a number of offers. It has not paid any dividends in the past two years and only expects to resume dividends in a further two years or so. The company retrenched 2195 staff and its debt fell sharply.
In its results for the six months to 30th June 2024, the company reported income up 5% and adjusted headline earnings per share (HEPS) up 9,1%. The company said, "The group's 5.0% increase in income, combined with effective cost control, yielded a continuing adjusted EBITDA margin of 27.3% which was in line with the prior period. This consistency highlights the effectiveness of cost optimisation initiatives implemented by the group and lower diesel costs following the reduction in load shedding. The group is in a strong financial position with South African debt (excluding IFRS 16 lease liabilities) at R5.4 billion."
In a trading statement for the year to 31st December 2024, the company estimated that HEPS would increase by between 14,1% and 19,8%. The company said, "Sun International retains a strong financial position as it continues to de-gear, with debt (excluding IFRS 16 lease liabilities) decreasing from R5.7 billion in FY23 to R5.2 billion as at 31 December 2024."
Technically, the share has been in a volatile upward trend since its low point in May 2020. It should continue to recover.
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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.