Casino gaming revenue likely to remain under pressure

CASINO and hotel operator Sun International scrapped its dividend after reporting a drop in annual profit yesterday, seeking to conserve capital to reduce debt and complete a casino complex in Pretoria.

It is scheduled to open its second-largest casino and entertainment complex, the R4.2 billion Time Square project, next month.

However, it has been hit by sluggish economic growth in the country.

“Taking account of the difficult trading conditions, the need to complete strategic group initiatives, particularly Time Square, and the need to reduce debt, the board decided not to declare a dividend for the period,” the company said.

The owner of Sun City resort and the Sibaya Casino in South Africa said the slowing economy, foreign exchange losses and settlement charges resulted in a 35% drop in fullyear profit.

The group’s core casino operations in South Africa were negatively affected by sagging demand from gamblers due to “difficult trading conditions and reduced consumer spend” with casino rev- enue down 2.7%.

Chief executive Anthony Leeming, who took the helm last month, said gaming revenue in South Africa would remain under pressure due in part to increased personal income taxes and reduced disposable income.

“Hotel occupancy is, however, anticipated to grow for the remainder of the year and will be boosted by the refurbished conference and entertainment centre at Sun City, where forward bookings for conferences are well up on last year,” Leeming added. – Reuters