Sun International Post Impressive Rise For 2023

Sun International, the South African gaming company, has reported a year-on-year increase in income of 5.5% to ZAR12.10bn (£505.0m/€590.4m/$643.3m) in 2023. The performance was primarily due to the record-breaking performance by its SunBet sportsbook brand.

The company’s overall income for 2023 was 7.0% higher than the ZAR11.3m achieved in the previous year. Although the company experienced growth in certain areas, other areas saw a decline. The standout performances were from its SunBet brand and its Sun City casino, which saw an income increase of 14.8%.

Unfortunately, several of its casino properties faced a decline, particularly in slots operations due to “load shedding”.

In December 2023, Sun International expanded its portfolio by acquiring Peermont. The acquisition includes the flagship Emperors Palace resort and online brand PalaceBet, and is valued at ZAR7.30bn. It’s expected that the deal will close by the end of the year.

While challenges persist due to the wider economic climate and load shedding, trading levels in early 2024 have shown improvement. The company continues to focus on operational efficiencies to maintain and grow its income and margins. The robust performance of SunBet and the company’s resort and hotel properties suggest positive growth in both income and adjusted EBITDA in 2024.

Gaming was the primary source of income for Sun International in 2023, with a 3.2% increase to ZAR9.29bn. Slots were the main contributor to this income, bringing in ZAR5.51bn, despite a 2.8% decrease from the previous year.

On the other hand, table games income rose by 5.9% to ZAR1.59bn, and income from Sun Slots and SunBet also saw a 1.9% increase to ZAR2.19bn.

Non-gaming operations also saw a significant increase in revenue – up by 21.7% to ZAR2.81bn. The company reported a 32.6% increase in room revenue to ZAR1.13bn, a 14.9% increase in food and beverage revenue to ZAR986m, and a 13.7% rise in other revenue to ZAR591m.

In 2023, Sun International’s GrandWest casino was the highest income generator at ZAR1.88bn, a 3.0% increase from the previous year. This was closely followed by Sun City at ZAR1.87bn and Sun Time Square at ZAR1.51bn.

SunBet, the sportsbook brand of Sun International, had a record-breaking year, generating ZAR733m in income. The Sun Slots brand also performed well, bringing in ZAR1.47bn in income, although this was a 2.7% decrease from 2022.

Despite rising costs in various areas, Sun International still posted an improved operating profit of ZAR2.50bn, a 2.5% increase from the previous year. The main cost for 2023 was employee expenses, which rose by 7.6% to ZAR2.31bn.

Despite these expenses, the company’s pre-tax profit was 29.4% higher at ZAR1.77bn, leading to a total comprehensive net profit of ZAR1.30bn for 2023, up by 62.1% from the previous year.

Sun International says it is optimistic about the future, stating that their balance sheet remains strong and will continue to deliver industry-leading cash returns to shareholders. The company is focused on integrating and positioning the combined group (with the addition of Peermont) to deliver earnings and cash flow accretion with comfortable levels of gearing immediately post-completion.