Sun International’s interim results reflected the significant impact of the pandemic on the group. It has reacted proactively to protect its short-term business and position itself for a sustainable recovery after the COVID-19 lockdown.
SUN INTERNATIONAL TAKES A LOOK AT THE ENCOUNTERS
Although the group has chosen to continue paying salaries, at significantly reduced levels, it is currently undertaking a downsizing exercise under Section 189A.
The proposed layoff would have a potential impact on around 2,300 employees in South Africa. This downsizing exercise has a particular impact on Sun City, Maslow Sandton, Boardwalk, The Table Bay and Wild Coast.
“The COVID-19 pandemic has forced us to undertake a more in-depth review as we anticipate that it will take some time for our properties, especially our hotels and resorts, to recover,” said Anthony Leeming, CEO of Sun International .
“We had to make painful decisions, but I am extremely proud of the speed and efficiency of our response, which put the group on a solid footing as we now move forward that lockdown restrictions have been relaxed significantly in South Africa. ,” he said.
CLOSURE OF TWO CASINOS
Sun International has responded swiftly to the COVID-19 crisis and has taken decisive action to address near-term liquidity risks, including up to a 60% reduction in labor costs across the group.
The group also announced the closure of Naledi Casino and Carousel Casino and accelerated the sale of non-strategic assets.
“A successful rights offering raised R 1.2 billion to help with liquidity during the pandemic and subsequent recovery,” Leeming said.
Post-lockdown operational plans, including detailed security protocols for staff and customers, were finalized before the reopening and operations of the South African casino were able to start negotiating from July 1, 2020, subject to strict operational protocols.
“With the recent announcement of the passage to level 2, which will allow the resumption of interprovincial travel, we will open Sun City in September 2020. However, Table Bay and The Maslow Sandton will remain closed until there is sufficient demand to justify their reopening, ”said Leeming.
Extremely difficult trading conditions following COVID-19 put significant pressure on the group’s performance. Consolidated profit fell 56% from R 8.5 billion to R 3.7 billion, and EBITDA fell 96% from R 1.1 billion to R 79 million.
According to Leeming, the group’s adjusted overall profit fell from 172 million rand to a loss of 885 million rand, with a loss of adjusted earnings per share of 702 cents per share.