Sun City owner gets online gambling boost 

Sun International reported strong results for the 2023 financial year, as the company’s online gambling business skyrocketed.

Sun International released its results for the year ended 31 December 2023 today, which revealed a solid performance for the hospitality and gambling group.

Income for the year was up 7% from the prior year to R12.1 billion, and South African adjusted EBITDA was up 3.0% to R3.4 billion. 

Profit for the year grew from R765 million in 2023 to R1.39 billion – an over 80% increase.

Adjusted headline earnings were up 4.6% on the prior year, to R1.1 billion, with adjusted headline earnings of 468 cents per share, up 5.9% on the prior year.

The company revealed that, overall, the gaming market in South Africa grew for a third successive year, reaching R55.8 billion in gross gaming revenue. 

Gaming income makes up 76.8% of Sun International’s total group income and showed continued sustained growth, with income up 3.3%. 

However, Sun International’s casino income decreased by 1%. The company attributed this to Sun Slots’ operations being impacted by load-shedding, with income slightly behind the prior year. 

Sun International said its adjusted EBITDA margin was impacted by increased diesel costs of R60 million compared to the prior year and the relatively higher growth in income from resorts and hotels, which operates at a structurally lower margin than urban casinos. 

Resorts and hotels income achieved exceptional growth, increasing by 17.4%, with Sun City achieving record profitability and net positive cash flow contribution to the group.

Overall, Sun International’s adjusted EBITDA margin improved from 27.2% at the 2023 half-year to 28.1% for the full year. 

Excluding the impact of the net diesel costs attributable to load-shedding, Sun International would have achieved a 28.9% adjusted EBITDA margin. 

The company said a renewable energy strategy is being implemented to protect margins and ensure energy security.

However, the star of Sun International’s results was SunBet – the company’s online gambling platform.

SunBet generated record income during the 2023 financial year, up 116.2% and is ahead of its aggressive growth targets set for this business. 

The platform’s adjusted EBITDA was up over 400% from R42 million in 2022 to R221 million in 2023.

This saw SunBet achieve an operating profit of R218 million – up significantly from R39 million the previous year.

On the back of these strong results, Sun International declared a final gross cash dividend of 203 cents per share, totalling R532 million.

This brings total dividends for the year to 351 cents per share, totalling R920 million and equating to a dividend yield of 9.0% as of 15 March 2024.