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South Africa – Tsogo Sun bounces back from COVID with 144.3 per cent increase

By - 25 November 2021

South African casino operator Tsogo Sun bounced back with a revenue increase of 144.3 per cent in the first half of its year.

Total income for the six months ended September 30 2021 of R959m (2020: R335m) ended R624m above the prior year with a R427m and R210m increase in hotel rooms’ revenue and food and beverage revenue respectively. Other revenue decreased by R16m to R124m (2020: R140m) and in the current year included revenue relating to the Castle Lager Lions Series tour of R64m (2020: Covid-19-related income of R117m relating to hotels used as quarantine and isolation facilities as well as the Premier Soccer League bio-bubble).

The company said: “The third wave of Covid-19 infections and the slow vaccination rollouts both locally and globally are clear indications that recovery in the group’s trading to pre-Covid levels will extend beyond FY22 and into FY23.

Gaming generated revenue up127.6 per cent to ZAR3.33bn with casinos accounting for ZAR2.72bn. Bingo generated ZAR317m whilst Limited Payout Machines generated revenue of ZAR754m. Online gaming produced revenues of ZAR37m.

Trading for the group’s South African hotels for the six months recorded system-wide (including owned and managed hotels but excluding externally managed hotels) revenue per available room (RevPar) of R238 (2020: R54) due to a 18.5 percentage points (pp) increase in occupancies from the prior period to 23.9 per cent (2020: 5.4 per cent) and a slight increase in average room rate to R996 (2020: R994). Occupancy for the current and comparative six-month period is expressed as a percentage of total rooms available irrespective of whether the hotel traded or not.

The management activities of the South African hotels, net of group corporate office costs, generated Ebitdar of R145 million (2020 loss: R51 million) for the period. This performance results from a R35 million increase in internal and external management fee income due to improved trading levels, net insurance proceeds in the South African hotel division of R148 million and central office cost savings of R13 million.

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