Results in Chile, South Africa strong
Sun International CEO Graeme Stephens said the company saw lower-than-projected results for the financial year ending in June due to its underperforming casino in Panama, which opened in the same year, and foreign exchange losses in Nigeria. Adjusted headline earnings posted at R754 million (US$57.6 million) and diluted adjusted headline earnings at 723c per share, a year-on-year increase of 10 percent, according to Business Day Live.
Stephens said the company would have reported a 27 percent increase in headline earnings without the startup costs and currency issues. Despite the more modest results, Sun increased its dividend 13 percent to 175c per share.
The casino in Panama “is not yet a year old, so we don’t want to have a knee-jerk reaction. We want to give it time to ramp up,” Stephens said.
Compensating for the setback in Panama, Sun’s Monticello casino in Chile is performing well. Monticello revenue was up 14 percent in local currency (11 percent in rand) with casino revenue up 13.4 percent, BDLive reported. The property was close to revenue levels it had achieved before a smoking ban was implemented in March 2013, Stephens said. And in South Africa, Sun’s GrandWest in Cape Town, Carnival City in Gauteng and Sibaya in Durban all performed better due to earlier cost-cutting.
“On top of a very tough trading environment, the challenge now is for the management team to bed down the numerous transactions currently pending, thus providing the market with some certainty as to the ultimate shape and direction of the group,” said Kagiso Asset Management analyst Dirk van Vlaanderen.
