Sun International reported a 7.4% increase in group income for the first half of the year, reaching R6.58 billion ($411.9 million), primarily fueled by its online betting platform, SunBet. This performance comes despite the exclusion of revenue from the Table Bay Hotel, managed under an agreement with IHG.
The company's adjusted EBITDA, excluding the hotel, rose by 2% to R1.59 billion, with revenue growth positioned at the high end of expectations. Sun International's online division saw significant success, with SunBet's revenue climbing 35.5% year-over-year to R1.18 billion.
Ulrik Bengtsson, CEO of Sun International, highlighted that SunBet's growth significantly outpaced the overall South African online market, which expanded by 19% during this period. Activations on the platform showed promise, with a 32.3% increase in active player days and a 17.5% rise in new depositors.
The enhancements in SunBet were made possible by the introduction of proprietary technology, including a revamped user interface in both South Africa and Botswana. Bengtsson described the early successes as “encouraging,” emphasizing that growth is primarily driven by existing customers in slots and casino offerings while efforts to expand the sports segment are gaining traction.
In addition to online revenues, Sun International's land-based casinos segment also returned to growth, achieving a 1.5% rise in revenue to R3.42 billion. The company’s market share in this segment went up by 2.3%, reaching 49%. Investments in marketing and new product introductions, including 876 new slot machines and stadium games, were credited for this growth, although land-based gross profit saw a slight decline of 0.7% to R2 billion, largely due to increased marketing costs.
Looking ahead, Sun International anticipates further improvements as the gaming landscape shifts towards more digital experiences, supported by an operational restructuring aimed at enhancing margins and overall profitability.
In hospitality, revenue grew 2.8% to R1.29 billion, despite facing a R20 million impact from cancellations related to ongoing conflicts.
As Sun International has seen a promising start to its second half, with revenue growth exceeding its guidance of 6% to 8% as of August 31, the company has also ramped up its capital expenditures from R277 million to R492 million. Bengtsson noted this was part of a strategy to enhance capabilities and market share, along with a focus on a more centralized, cost-effective operating model.
Currently, Sun International is undergoing consultations regarding potential job reductions as a measure to optimize performance in line with the forthcoming changes. The company stressed its commitment to handle any potential restructuring with fairness and transparency, aiming to redeploy affected employees where possible. The introduction of the "Casino Lite" model during H1 aims to boost profitability for smaller properties by refining operations in both the gaming and hospitality sectors.
