Operator News
South Africa – Sun City sees record profitability with SunBet Sportsbooks also reaching new highs
By Phil - 18 March 2024
South African casino and hotel group Sun International generated a 5.5 per cent year-on-year increase in revenue to hit R12.10bn (€590.4m) in 2023, fuelled by a record performance by its SunBet sportsbook brand and its flagship casino Sun City.
The gaming market in South Africa grew for a third successive year to R55.8bn gross Tgaming revenue. Gaming income, which makes up 76.8 per cent of total group income, showed continued sustained growth with income up 3.3 per cent. Casino income proved resilient and decreased by only one per cent. Sun Slots’ operations were impacted by load shedding with income slightly behind the prior year. SunBet generated record income during the 2023 financial year, up 116.2 per cent and is ahead of its aggressive growth targets set for this business. Resorts and hotels income achieved exceptional growth, increasing by 17.4 per cent, with Sun City achieving record profitability and net positive cash flow contribution to the group.
SunBet has continued its strong growth trajectory and is exceeding its five-year targets. Overall income was up 116.2 per cent on the prior year, to R733m delivering a record adjusted EBITDA of R221m.
Despite a challenging operating environment due to load shedding and the resultant increase in diesel costs, casino income was up 0.2 per cent with adjusted EBITDA of R2.4bn for the year. Resorts and hotels had an exceptional year with strong growth in income and an encouragingly significant improvement in the adjusted EBITDA margin following the substantial work done on the cost base. Within the segment, rooms and food and beverage revenue achieved exceptional growth, increasing 28.9 per cent year on year. Sun City achieved record profitability and net positive cash flow contributions to the group.
Domestic leisure, conferencing and sports and events revenues continue to grow while international leisure business recovered strongly during the year. Within the segment, rooms and food and beverage revenue achieved exceptional growth, increasing 28.9 per cent year on year.
The operator stated: “Our results once again demonstrate that Sun International has a unique integrated portfolio of high quality gaming and hospitality businesses that will continue to deliver sustainable earnings and position us well for growth. We are executing effectively on our omnichannel strategy and are focused on extracting further operational efficiencies as we look to protect and grow our income and margins. While the economy and load shedding is placing pressure on our urban casinos, trading levels at the start of 2024 have improved marginally and our Limited Payout Machines operations are demonstrating continued resilience. SunBet is achieving significant income growth and is exceeding key performance indicators. This strong momentum is expected to continue with another substantial increase this year as the business expands rapidly. Our resort and hotel properties have continued to perform exceptionally well, and we anticipate another good year from them in 2024.”
