South African hotel and casino operator Sun International reported its results for the fiscal year ended June 30, 2016. The company generated full-year revenue of R12.2 billion, reflecting a 15% increase from the amount of R10.6 billion posted for the former financial year. Casino revenue totaled R9.3 billion, up from R8.6 billion reported for the twelve months ended June 30, 2015.
The company provides its services in South Africa, Nigeria, and Latin America. Casino revenue from South Africa increased from R6.92 billion in 2015 to R7.02 billion in 2016. Sun International reported overall revenue from its operations across the country of R9.5 billion, up from the R8.6 billion generated during the fiscal year ended June 30, 2015.
Latin American casino operations contributed R2.2 billion to the operator’s full-year casino revenue. Overall revenue from the region totaled R2.5 billion.
Casino revenue from Nigeria amounted to R102 million, down from R107 million posted for the previous financial year. Overall revenue from the Western African country amounted to R214 million, up R2 million from the R212 million reported for the year ended June 30, 2015. The company said in its full-year report that it has decided to exit the local market due to weak economic growth and issues with local regulators.
Early in 2016, the Nigeria Economic and Financial Crimes Commissions initiated a probe into the South African hotel and casino operator’s original investment into the country’s Tourist Company. Commenting on its decision, Sun International noted that the exit will be completed in a manner that would not cause any further value erosion.
Sun International reported operating profit of R926 million, down from the R2.1 billion generated during the previous fiscal year. Loss before tax amounted to R6 million, reflecting a considerable decrease from the R1.4-billion profit generated in 2015. Overall loss for the year totaled R503 million, down from profit of R1 billion reported for the year ended June 30, 2016.
The gambling operator attributed the substantial loss to purchase costs and legal settlements. Sun International had to pay its rival hotel and casino company Peermont the amount of R675 million so as for the latter to agree to lift its objection for the Morula Casino license to be transferred to the Time Square Casino at Menlyn Maine. The hotel and casino resort is currently under construction and is scheduled for an April 2017 opening.
