Sun International reports solid half-year casino and hospitality sector results

Sun International delivered a solid interim financial performance as the benefits from its omnichannel approach and diverse gambling and hospitality assets started to pay off.

Adjusted headline earnings increased by 5.9% to R555 million for the six months to June 30, translating to adjusted headline earnings of 229 cents per share, a 6.5% increase over the prior period. An interim dividend of 172 cents per share reflected a 6.8% increase.

The chief executive since July 1, 2025, Ulrik Bengtsson, said in an interview with BR he was still at a stage where they were looking at all the businesses  and assessing areas of potential growth. He would release more details of that process at a later stage.

He said that the interim results reflected a “solid performance”, particularly the Sunbet Group, which had increased income by 70.7% due to an increased volume of activity and deposits.

The Sun Slots strategy also showed positive outcomes, with income improving by 2.2% to R701m. Sun Slots' strategy aimed to grow gross drop revenue per machine and also to increase income from Type B license rollouts—these are typically low-stakes machines found in pubs, clubs, and on-casino venues.

Bengtsson said all four business portfolios in th group had their own clear set of opportunities.

Group continuing income increased 3.2% to R6.2 billion (including Table Bay Hotel). Excluding the impact of the Table Bay Hotel (TBH) lease cessation, group continuing income was 6.7% higher.

Group continuing adjusted earnings before interest, tax, depreciation, and amortisation (EBITDA) fell 3.8% to R1.6bn. Excluding the TBH lease cessation, continuing adjusted EBITDA rose 1.1%.

In Sunbet Group, urban casinos' income fell 1.4%. Some operational challenges, combined with a casino market that was under pressure, required the group to reassess its approach to this business segment.

Excluding the TBH, resorts and hotels revenue was up 4.3% to R1.3bn, driven by the recovery of conferencing and events.

The Table Bay Hotel is undergoing a refurbishment and is expected to reopen in December 2025 as The InterContinental Table Bay Hotel, Cape Town. The hotel will be managed by Sun International under a hotel management agreement.

Bengtsson said that the balance sheet remains strong and this provided the group with optionality when it came to pursuing any opportunities that may arise.

“After the mutual decision not to proceed with the Peermont acquisition, we will look at our capital allocation policy to ensure that we have the right balance between returns to shareholders, investment in the business, and value-accretive M&A,” he said.

Urban casinos, the cornerstone of Sun International’s land-based operations, reported income of R3.2bn, representing a 1.4% decline. As the land-based casino market remains under pressure, the group’s approach to this portfolio was being reassessed. 

A new operating model to position the urban casino portfolio as integrated entertainment destinations was being implemented. Investment was being directed towards casino floor optimisation, service enhancements, product innovation, and marketing to better convert footfall.

The limited payout machine business, Sun Slots’ primary focus was to optimise its existing portfolio by targeting optimal sites in key regions and coordinating the rollout of Type B licences.

The resorts and hotels sector in South Africa experienced growth after a slow start to the year, driven by a resurgence in conferencing as the country hosts the G20 Summit and improved occupancy rates. The rooms and food and beverage revenue, excluding the TBH, increased 9.9%.

Excluding the TBH, adjusted EBITDA for resorts and hotels, pre-management fees, was R221m, down 12% from R251m in the prior period.

BUSINESS REPORT