internationalcasinoreview Business NEWS
Sun International full year revenues and profits up
A bullish atmosphere is in evidence at Sun International, where a solid year’s business despite some brickbats has led to modest increases across the board. The company is also in the thick of expansions and upgrades to consolidate its position
sunrising SUN INTERNATIONAL
Despite what the company has termed “a difficult and challenging trading environ- ment”, Sun International reported a 12 per cent increase in revenue and an increase of one per cent in EBITDA for the year to June 30, 2011. Group revenue increased 12 per cent to R8.9bn (E881.1m) while compara- ble revenue (excluding the Federal Palace in Lagos, Nigeria and adjusting Mon- ticello for the business inter- ruption in 2010) was five per cent ahead of the previ- ous year. Casino revenues were 12 per cent ahead of last year at R7bn (E693m), while com- parable casino revenue increased by seven per cent. EBITDA increased by one per cent to R2.6bn (E257.4m) while the EBITDA margin declined three per- centage points to 29 per cent. Adjusted headline earnings increased by one per cent to R512m (E50.7m). CEO David Coutts-Trotter said that in general, average visits and spend per customer had marginally increased compared to the previous year but added that South African customers continued
to feel economic pressure. He said: “We are continu- ing to invest in the expansion of the business as evidenced by the developments at the Wild Coast and Boardwalk. Capital expenditure was R924m (E91.5m) in the year under review and included a new salon privé at Windmill, commencement of the Boardwalk expansion, refur- bishments at Wild Coast Sun and Kalahari Sands and other ongoing asset replacement.” Borrowings decreased by R380m (E37.6m) to R5.9bn (E584.1m). A further major investment in the future is the replacement of the group’s enterprise gaming system, which will begin in the coming year and take two years to implement across all the group’s units. GrandWest continued to
feel the effects of a depressed regional economy and achieved revenue of R1.65bn (E163.3m) and EBITDA of R625m (E61.9m), which were four per cent and two per cent ahead of last year respectively. Carnival City’s revenue increased by one per cent to R973m (E96.3m), while EBITDA declined by three per cent to R295m (E29.2m), reflecting the weak Gauteng market. Sibaya increased revenue by six per cent to R904m
(E89.5m). EBITDA of R310m (E30.7m) was five per cent ahead of last year. Board- walk’s revenue increased by four per cent to R429m (E42.5m) and EBITDA by one per cent to R162m (E16m). Gaming revenue at the Federal Palace for the year was R49m (E4.8m). Turning to the Chilean
operation, Coutts-Trotter said: “Our Monticello busi- ness has performed very well. Despite increased com- petition from our competi- tor in Rinconada, we have grown the business and achieved pleasing results, benefiting from a relatively strong Chilean economy and further growth in the propensity to gamble within the region. Management has been focused both on cus- tomer acquisition and reten- tion, and there has been a considerable effort in man- aging costs to improve margins.” Revenues at Monticello
increased by 21 per cent to R1.06bn (E104.9m) over esti- mated revenues for 2010 (based on eight months of actual revenues and four months of insurance claim following the earthquake in February last year). EBITDA of R156m (E15.4m) increased by 58 per cent. The expansion of the
Currency rise hits Aristocrat HY Half-year revenues at Aristocrat fell 8.2 per cent to A$312.7m (E233.6m) off the back of a strong rise in the Australian dollar in the last year. At a constant rate, revenues would have been up 3.8 per cent. Reported post-tax profits, were down 31.5 per cent to A$25.2m (E18.8m) (down 12.8 per cent at the constant rate), due mostly to increased interest charges. Operational performance of the group, at the constant rate, was down by a marginal three per cent in the period.
Additional credit line for AERL
creditdue AERL
One of Sun International’s
major projects for the year is the upgrade of the Boardwalk
Boardwalk began in Novem- ber 2010. The construction of the 870 bay car park, a new conference centre and 135- room, luxury five-star hotel is underway with an estimated completion date of Decem- ber 2012. The conversion of the existing conference centre into the new smoking casino is also underway with an anticipated opening in December 2011.
The
company will spend an esti- mated R595m (E58.9m) in the 2012 financial year, and the balance of R272m (E26.9m) thereafter.
Bally ‘well positioned’ despite profits fall
positivethinking BALLY TECHNOLOGIES
“The highlight of Bally’s fiscal 2011 was the position- ing we accomplished for the future,” said the company’s CEO Richard Haddrill. “We grew gaming operations revenue by 11 per cent and established a strong base of innovative games going forward. We also success- fully commercialised two major new product lines, our Alpha 2 gaming platform and the iVIEW DM floor- wide network. Further, we invested in key new cus- tomers and markets, such as
Australia and Italy, which should provide good revenue and earnings growth in the current and future years.”
Despite the positive tone
for the future from Bally, it saw its total net revenues for the year to the end of June 2011 fall by 2.6 per cent to $758.2m (E555m). Rev- enues from sales of gaming equipment dropped 9.9 per cent to $246.m (E180.5m), while those from systems fell 11.3 per cent to $193m (E141.3m). However, recur- ring revenues from gaming operations rose 11 per cent to $318.6m (E233.2m).
Net profit for the year was
down 28.5 per cent to $98.3m (E71.9m), although the comparison figures from 2010 were inflated by gain on the disposal of discontin- ued operations. The company sold almost 22 per cent fewer machines in year at 13, 537 units, however, the average selling price was ten per cent higher at $15,832 (E11,589). Its installed based of leased equipment was higher in all categories at the end of the year. Gaming monitoring units rose 5.4 per cent to 407,000 units, at 622 customer sites
up from 599 the previous years. The number of rental and daily fee games was up 8.5 per cent to 14,315 at year end. “We placed more than 500 Cash Wizard games, our first Alpha 2 premium game with a spinning wheel bonus, and we began rein- vesting in our wide-area pro- gressives in the June quarter,” said Ramesh Sri- navasan, president and COO. “This reinvestment was led by the launch of Betty Boop’s Love Meter, as well as Money Vault, the first title on our new Pro Series Hammerhead cabinet.”
GrandWest’s initial ten-
year casino exclusivity in the Cape Metropole expired during December 2010. The Provincial Government of the Western Cape is still con- sidering whether to permit one of the casino licence holders in the Western Cape to relocate to the Cape Metro- pole and has engaged inter- ested stakeholders before taking a final decision. The company said there is insuffi- cient information yet to assess the potential impact on GrandWest’s revenue and profitability.
Macau junket operator AERL has announced an additional HK$100m (E9.4m) interest-free line of credit for its VIP room at the Star World Hotel & Casino, bringing its total credit line for the venue to HK$200m (E18.8m). Overall, the company now has total lines of credit for its VIP rooms of HK$430m (E40.3m) - HK$200m each at Star World and the new Galaxy Macau Resort and HK$30m (E2.8m) at the Venetian Macau. All lines of credit are interest-free, non-dilutive and guaranteed by the company’s founders Messrs Lam and Vong. AERL chairman Lam said: “Receiving [this additional] line of credit is further evidence of our success in increasing rolling chip turnover at our VIP rooms and ultimately in generating additional net income for AERL and our partners, as well as increasing equity value for our shareholders. With the ability to now tap up to HK$430m in lines of credit, we expect to be able to grow our presence even more quickly in Macau.” With the increase in cage capital from the new line of credit, the company is reiterating its rolling chip turnover 2011 guidance for its three existing VIP rooms of US$1.7bn (E1.24bn) per month and now expects to be at the higher end of it 2011 profit guidance of $70m to $77m (E51.2m to E56.4m).
Bally CEO Richard Haddrill
October 2011 • businessnews 63
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