Sun International expects post-Covid-19 lockdown recovery to be slow
Hotel and casino group Sun International says the easing of recent lockdown restrictions has resulted in improved trading activity, but it does not expect the recovery to be quick.
The group is battling to survive after Covid-19 brought travel to a halt and shuttered hotels and casinos, but said on Monday it was confident it could recover from the pandemic.
Group debt stood at R15.1bn at the end of the Sun International’s six months to end-June — an increase from R13.3bn in December, and well in excess of its R3.3bn market capitalisation.
The group, however, has secured a string of concessions from lenders, while it had also raised R1.2bn through a rights offer in August. Also in August, the group announced it had agreed to sell its majority stake in Latin American operation Sun Dreams to partner Nueva Inversiones Pacifico Sur for $160m (R2.7bn).
Sun International reported an adjusted headline loss of R885m for its six months to end-June, from earnings of R172m previously, amid Covid-19 costs and R1.18bn in writedowns, including R900m for Sun City.
The group is moving to cut staff, while it has also decided to close the Naledi Casino and Carousel Casino. Gaming revenue had only gradually improved towards the end of July and has continued to improve in August, Sun International said.
“The Covid-19 pandemic has hit the gaming and hospitality sector particularly hard and forced us to make some tough choices to protect the business and to as far as possible limit the impact on employment,” CEO Anthony Leeming said.
“While we anticipate the recovery will take time, we have placed the group on a firm footing for the future, realising operational and cost efficiencies and improving the guest experience that will position the group for growth when the outlook improves,” Leeming said.
In morning trade on Monday, Sun International’s share was unchanged at R12.50, having fallen by almost three quarters over the past two years.
To read more, click here.