Sun INTL on Record Dividends and Growth

Sun International Ltd has announced remarkable results for its fiscal year 2022, marked by a record dividend declaration and significant expansion in alternative gambling companies. The company’scompany’s strategic efforts have led to a 96% increase in adjusted EBITDA, reaching an impressive R3.3 billion. This growth can be attributed to various factors, including the market share gains in its urban casinos, the successful recovery of Sun City, and the implementation of cost-saving measures.

Additionally, adjusted headline earnings soared from R110 million to R1.1 billion. This surge resulted in adjusted earnings per share climbing from 44 to 439 cents, showcasing the company’scompany’s financial progress.

The adjusted EBITDA margin also experienced a positive shift, reaching 29.7% compared to 28.2% in the previous year. Although the target-adjusted EBITDA margin of 30% was not achieved due to net diesel expenses resulting from load shedding, Sun International remains focused on maximizing operational efficiency.

Additionally, compared to 2021, urban casinos expanded by 41%, resulting in an effective EBITDA of R2,445 million for the year.

Capitalizing on its improved financial standing, Sun International resumed dividend payments, distributing a total cash dividend of 329 cents per share for the year, representing 75% of AHEPS.

Anthony Leeming, CEO of Sun International Limited, stated:

““With SunBet exhibiting great growth in all important measures, we are delighted by the substantial progress we are making with our online approach… with revenue up 36%, gaming revenue from casinos, Sun Slots, and SunBet showed a remarkable rebound””. 

With 5,000+ Limited Payout Machines (LPM) operating in the study period, Sun’sSun’s slot machines experienced organic growth. The company plans to collaborate with regulatory authorities to further expand the deployment of LPMs to the designated 6,500 LPM posts.

The revenue generated by Sun Slots surged from R1,242 million to R1,491 million. At the same time, SunBet witnessed an impressive 135% revenue increase in the second half of the fiscal year, an 86% improvement from the previous year. Sun International’s online gaming and sports betting platform saw continued expansion with the introduction of new games.

Additionally, SunBet saw a 50% increase in actively playing players and a 130% increase in deposits.

In a strategic move to enter new markets, Sun International invested R58 million ($3.2 million) in SunBet Africa Holdings, securing a 70% stake. The company now holds licenses for online gambling and sports betting in Zambia, Ghana and Kenya, positioning itself for long-term growth in these promising regions.

Despite a challenging start to the year due to the Omicron variant, Sun International’sInternational’s resorts and hotels demonstrated resilience, experiencing a solid recovery. Domestic leisure, conferences, and events surpassed 2019 levels, while the international leisure business improved in the latter half of the year.

Thus, the total revenue from resorts and hotels increased by 65% from the previous year to almost R2,5 billion.

Notably, the resorts and hotels achieved an adjusted EBITDA of R450 million, a significant improvement compared to the previous year’syear’s loss of R56 million.

Looking ahead, Sun International is well-positioned to deliver cash returns to investors following the completion of its de-gearing program. The company expects SunBet’s revenue growth to remain strong, fueled by the successful launch.

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