Sun International interim results have reflected the significant impact the pandemic had on the group. It has responded proactively to protect its business in the short term and position itself for sustainable recovery post the COVID-19 lockdown.
SUN INTERNATIONAL LOOKS AT RETRENCHMENTS
While the group chose to continue paying salaries, at significantly reduced levels, it is currently undertaking a Section 189A retrenchment exercise.
The proposed retrenchment would potentially impact approximately 2 300 employees in South Africa. This proposed retrenchment exercise in particular impacts Sun City, Maslow Sandton, Boardwalk, The Table Bay and Wild Coast.
"The COVID-19 pandemic required us to undertake a deeper review as we anticipate that it will take some time for our properties, in particular our hotels and resorts, to recover," said Sun International CEO Anthony Leeming.
"We've had to make some painful decisions, but I'm extremely proud of the speed and effectiveness of our response, which has put the group on a sound footing as we push ahead now that lockdown restrictions have been significantly eased in South Africa," he said.
CLOSURE OF TWO CASINOS
Sun International responded quickly to the COVID-19 crisis and took decisive action to address short-term liquidity risks, including up to a 60% reduction in payroll costs across the group.
The group also announced the closure of Naledi Casino and Carousel Casino and accelerated the disposal of non-core assets.
"A successful rights offer raised R1.2 billion to assist with liquidity during the pandemic and subsequent recovery," said Leeming.
Post-lockdown operational plans, including detailed safety protocols for staff and customers, were finalised in advance of reopening and the South African casino operations were able to commence trading with effect from 1 July 2020, subject to strict operational protocols.
"With the recent announcement of the move to Level 2, which will allow inter-provincial travel to resume, we will be opening Sun City in September 2020. The Table Bay and The Maslow Sandton will, however, remain closed until there is sufficient demand to justify their reopening," said Leeming.
The extremely challenging trading conditions as a result of COVID-19 placed significant pressure on the performance of the group. Consolidated income declined by 56% from R8.5 billion to R3.7 billion, and EBITDA reduced by 96% from R2.1 billion to R79 million.
According to Leeming, group adjusted headline earnings declined from R172 million to a loss of R885 million, with adjusted headline earnings per share loss of 702 cents per share.