Shares in Sun International rose yesterday after the JSE-listed gaming and hotel group said it continued to see improved trading conditions across its businesses, and as it saw strong cash generation and paired down its debt.
In mid-morning trade yesterday, the share was up 3.02 percent to R29.35.
The financial performance of the group for the first five months to May 31, 2022 compared to the first five months to May 31, 2021 reflected strong revenue growth of 34 percent, with adjusted earnings before interest, taxes, depreciation, and amortisation (ebitsa) up more than 80 percent, it said.
Total South African income for the current period was 92 percent of the income achieved for the comparable period in 2019, which demonstrated that the group had returned to a more normalised trading environment, it said.
Despite the lower revenues, adjusted ebitda and the adjusted ebitda margin were up on 2019, largely driven by ongoing efforts undertaken by management in 2020 and 2021 to eliminate excess costs and improve efficiencies across the group.
Total income for the current period compared to the prior period rose 34.4 percent to R4.3 billion. Casino income increased by 30.6 percent to R2.6bn, resorts and hotels income grew 62.3 percent to R977 million, Sun Slots income was up 15.9 percent to R597m, Sun Bet was up 40 percent to R105m.
Cash generation during the current period remained robust and as a result its South African debt, excluding lease liabilities, decreased from R6.4bn at December 31, 2021 to R5.8bn at May 31, 2022.
“Debt to adjusted ebitda and interest cover was well within Sun International’s lenders’ covenants and have returned to acceptable levels. Our balance sheet remains in a strong position and we continue to focus on increasing free cash-flows and disciplined capital allocation to maximise shareholder value,” it said. – Philippa Larkin