CEO: “The economy will turn”
Tsogo Sun Holdings Ltd., the largest gaming company in Africa, is upgrading casinos in its core market in expectations of an economic rebound.
“We’re at the tail end of the transformation of the portfolio,’’ CEO Marcel Von Aulock told Bloomberg News. “We’ve done all the work, so we are kind of waiting for the uptick to come.”
The company owns 14 casinos in six provinces in South Africa, where it commands about 40 percent of market share in the gaming industry. It also has more than 90 hotels in South Africa, Africa, the Seychelles and the Middle East. Tsogo Sun derives about 65 percent of its profits from gaming and 30 percent from hotels, and hopes to make gains despite a sluggish economic outlook. The South African economy is expected to grow at the slowest pace since 2009, when it was hit by recession.
The Johannesburg-based company’s optimism has been rewarded in the hotel sector, Bloomberg reported, with revenue up 9 percent due to a stronger-than-expected fourth quarter. Tsogo Sun stock is up 18 percent this year, valuing the company at 30 billion rand (US$2 billion).
Unlike rival Sun International, Tsogo Sun is not currently planning to add casinos outside its home country, the CEO said. “We just haven’t seen any reason for it,” he said. “Maybe one day when we completely run out of things to do in South Africa.”
Tsogo needs to “make sure we’re in the right place, make sure the product is good,’’ Von Aulock said. “At some point the economy will turn.’’
