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South Africa: Sun Group Lifts Revenue 7 Percent
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Business Day (Johannesburg)
9 May 2008
Posted to the web 9 May 2008
Sure Kamhunga
Johannesburg
SUN International yesterday reported a 7% rise in revenue in the third quarter period to March but warned shareholders of difficult trading conditions in its casino business, reflecting the downturn in spending by hard-pressed consumers facing soaring food prices.
The group, SA's biggest hotel chain, said in a business update for the quarter and nine months to March that revenue was R1,88bn against R1,76bn last year, while earnings before interest, tax, depreciation and amortisation rose 6% to R704m, from R662m.
"The performance of group casinos reflected difficult conditions affecting consumer spending in SA," Sun International (SUI) said, confirming a trend also affecting other companies as consumers tighten household budgets.
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Overall revenue growth in the quarter under review rose despite Easter this year falling in the quarter under review as against the final quarter last year. Casino revenue, at R1,44bn, was 6% higher than last year with better showings by GrandWest and Sibaya casinos, which had 9% and 12% growth respectively. Revenue at Carnival City and The Boardwalk fell by 3% and 4%.
The group said room revenue grew 15% to R243m. Average room occupancy of group hotels and resorts, at 78%, was three percentage points up on last year. Sun International also said its investment programme was on schedule in Chile, Nigeria and SA.
On the future, the group said trading conditions at casinos were expected to remain difficult , given pressures on disposable income. However, it expected this to be offset by stronger room revenue growth.
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