Sun International earnings scorched by Covid-19
The multinational hotel and leisure group has posted an annual income drop of almost US$400 million for the financial year ending December 2020.
DURBAN, March 15 (ANA) – Multinational hotel and leisure group Sun International [JSE:SUI] saw its annual income decrease by almost R6 billion (about US$400 million) for the financial year ending December 2020, according to its annual report.
The group’s financial results were posted on Monday in a Johannesburg Stock Exchange (JSE) announcement.
“Income from continuing operations declined by 49% from R11.8 billion to R6.1 billion and adjusted EBITDA reduced by 72% from R3.2 billion to R897 million.
“Our total group adjusted headline earnings declined from R763 million to a loss of R1.1 billion with an adjusted headline loss of 633 cents per share,” the SUI financial report said.
The group added that it had pulled out of its investment at the Sun Dreams resort in South America, from which it bagged a profit of R25 million.
Sun International operates 13 casinos across eight provinces in South Africa and around 19 resorts across Africa.
SUI’s operation in South Africa also experienced a drop in income, with a reported decline of 55% for the first six months of the year from the comparative period.
“Overall income from the South African operations declined by 48% from the prior year to R6 billion with adjusted EBITDA down by 70% to R984 million.”
Sun International said that the loss was owed primarily to the outbreak of the Covid-19 pandemic, which hobbled the hospitality and tourism sector.
Group operations ceased from March 2020 until June 2020 due to the introduction of the level 5 lockdown announced by President Cyril Ramaphosa.
SUI’s share price has also dropped by more than 50% since the beginning of the lockdown in South Africa.
“The South African lockdown regulations which were amended several times materially impacted our operations. As at the date of this report, our casinos continue to be impacted by the curfew and are trading at reduced capacity,” Sun International said.
The domestic hospitality industry in South Africa has said goodbye to many hotels since the outbreak of the pandemic, with the latest being the iconic Hilton hotel in Durban, which closed in January this year.
Hilton said the group decided to close the hotel after intense deliberations about the financial implications of the pandemic. More than a thousand Hilton hotels worldwide have closed since the outbreak of the coronavirus.
– African News Agency (ANA); Editing by Yaron Blecher
