Sun International Limited annual financials hit by coronavirus consequences

South African casino operator Sun International Limited has reportedly released its audited financial results for the twelve months to the end of December showing an overall loss of almost $82.51 million.

According to a March 16 report from Moneyweb, the Johannesburg-headquartered firm revealed that its annual financials were adversely impacted by the three-month coronavirus-related closure of its domestic businesses as well as ongoing restrictions to trade linked to the pandemic.

Considerable closures:

Sun International Limited runs or has an interest in 19 luxury resorts, hotels and casinos spread across five nations and reportedly saw its operational income for 2020 plummet by almost 49% year-on-year to $410.63 million as its net gaming win fell by 45% to $342.45 million. This purportedly came as the company was forced to shutter all of its operations in South Africa from late-March to June before being further burdened by associated travel and liquor bans, capacity restrictions, social distancing protocols and curfews.

Principal patient:

The four-hotel Sun City Resort near the South African city of Rustenburg is the largest of Sun International Limited’s properties and it reportedly took the biggest hit after being allowed to re-open only in September. This development is also home to the Palace of the Lost City and Valley of Waves tourist attractions and purportedly finished the year with an impairment charge of some $60.61 million.

Returns reversal:

Johannesburg-listed Sun International Limited is moreover responsible for South Africa’s The Boardwalk Casino and Entertainment World, Flamingo Casino and GrandWest Casino and Entertainment World and reportedly recorded a drop of 72% year-on-year in adjusted annual earnings before interest, tax, depreciation and amortisation to about $60.48 million.

Reportedly read a statement from Sun International Limited…

“The coronavirus pandemic had a significant impact on the group with all operations being closed for three months or longer and trading in March of 2020 being significantly disrupted. As a result of the extended lockdown and anticipated slow recovery we incurred impairment charges of $87.62 million being Sun City Resort at $60.61 million, The Boardwalk Casino and Entertainment World at $12.13 million, The Maslow at $6.47 million and intangible assets of $5.06 million.”

Proactive maneuverings:

However, the Chief Executive Officer for Sun International Limited, Anthony Leeming, reportedly divulged that his company had taken a number of steps to better cope with the impacts of the pandemic including a 60% reduction in payroll costs and the closure of its domestic Naledi Sun Hotel and Casino and Carousel Casino venues. The boss purportedly stated that the firm had furthermore recently deferred all capital investments, completed an $81 million rights offer and accelerated its disposal of ‘certain non-core assets’ such as its interest in South American casino operator Sun Dreams SA.

As a result of these latter two moves and Leeming reportedly went on to proclaim that Sun International Limited has now enhanced its liquidity and ‘significantly strengthened’ its balance sheet to ensure that it ‘remains well placed’ to deal with any future challenges so as to be able to ‘recover and grow into the future.’