Sun City-owner takes a hit

Hospitality and gaming giant Sun International is set to report mixed results for the first six months of 2025.

This comes as transaction costs related to its failed Peermont acquisition and specific accounting adjustments weighed on the company’s finances.

Sun International is a major South African company that operates resorts, hotels, and casinos nationwide. Its most well-known resort is Sun City in the North West.

The company also operates the popular online betting platform, Sunbet, which has seen tremendous growth over the past few years.

On Monday, 1 September, Sun International released a trading statement outlining its expected earnings for the six months ended 30 June 2025.

This statement showed that Sun International expects the following changes to its earnings compared to the first half of 2024:

• Headline earnings per share – increase by between 56.8% and 61.6%
• Adjusted headline earnings per share – increase by between 5.6% and 7.4%
• Basic earnings per share – decrease by between 8% and 11%

The company explained that the difference between basic earnings per share and headline earnings per share is mainly due to a revaluation of the carrying value of its contingent consideration relating to Dreams S.A.

This revaluation was performed after the company received CLP$7 billion (R80 million) from Pacifico in May 2025.

The difference between headline earnings per share and adjusted headline earnings per share is attributed to a R197 million decrease in the expected value of a liability linked to the company’s SunWest put option.

This liability resulted from the end of the company’s Table Bay lease and transaction costs of R11 million relating to the recent mutual termination of the Peermont acquisition.

In July 2025, Sun International pulled out of a R7.3 billion deal to buy Emperors Palace-owner Peermont Holdings.

This came after the Competition Commission recommended that the Competition Tribunal reject the proposed transaction in October 2024.

While the Competition Tribunal could still have approved the transaction despite this recommendation, the hearing dates for its decision would have occurred after the transaction’s longstop date of 15 September 2025.

Therefore, Sun International and Peermont mutually agreed to terminate the proposed transaction.

Despite these hits, Sun International said it remains in a strong financial position as it continues to de-gear.

The company’s debt decreased from R5.2 billion to R5 billion in the six-month period. Its debt to adjusted EBITDA remained flat at 1.5 times while interest cover increased to 6.8 times from 6.5 times in 2024.