GAMING FOR AFRICA


Sun International Optimistic Despite R1.1bn Loss


Despite income from its operations plunging by almost half to R6.1bn as reported in the group’s recent financial results, Sun International remains optimistic and says the recovery of SA hotels and casinos might be gradual, but it is upbeat about its debt and cash position. Sun International is the owner of landmark casino


complexes in South Africa such as Sun City, GrandWest and Boardwalk and the drastic drop in income, largely driven by government-instituted lockdown measures to curb the spread of the covid-19 pandemic virus, saw the group report a R1.1 billion headline loss for the year. Sun International, along with other gaming and


hospitality groups, was forced to shut operations for just more than three months (late March to June) in 2020, but faced ongoing trade restrictions (domestic and international travel bans, liquor bans, curfews, capacity limits due social distancing rules and so on). Sun City in North West province, the group’s


largest property, took the most pain after only being able to reopen in September. This led to the value of the resort, which is home


to the Palace of the Lost City and other landmark tourist attractions, being impaired by around R900 million at year-end. “The Covid-19 pandemic had a significant impact


on the group, with all operations being closed for three months or longer and the March 2020 trading significantly disrupted. Income from continuing operations declined by 49% from R11.8 billion to R6.1 billion and adjusted Ebitda [earnings before interest, taxation, depreciation and amortisation] reduced by 72% from R3.2 billion to R897 million,” Sun International says in its JSE results Sens statement. “Our total group adjusted headline earnings declined from R763 million to a loss of R1.1 billion with an adjusted headline loss of 633 cents per share,” it adds. Unsurprisingly, the group took its biggest hit in the


first half of the year to June 2020, when South Africa was under its hardest lockdowns (between late March and June). Income from its main South African business


declined 55% to R2.5 billion for the half-year compared with its corresponding half year to end-June 2019. This led to a 95% plunge in adjusted Ebitda for its 2020 half-year, to R80 million. With the resumption of trading of most operations


from July 1, 2020, Sun International notes that income and adjusted Ebitda improved steadily throughout the remaining six months until the move to adjusted Level 3 lockdown, coupled with the imposition of the 8pm curfew and alcohol sales ban in mid-December 2020. “This led to a significant drop in activity and


cancellation of bookings for the second half of December and into January 2021,” it says.


“As a result of the extended lockdown and


anticipated slow recovery we incurred impairment charges of R1.3 billion – being Sun City [R900 million], Boardwalk [R180 million], the Maslow Sandton [R96 million] and intangible assets of R72 million,” it adds. Commenting on the results in a separate media


statement, Sun International CEO Anthony Leeming said the group took key steps during the year to manage the impact of the pandemic on the business. “[This] ensured that the group was in a strong


position to deal with the lockdown and the restrictions imposed on its operations, but more importantly, they have placed the group on a solid footing for a post Covid-19 sustainable recovery,” he noted. “We worked hard to reduce costs, optimise


working capital, prioritise capital investment and negotiate with lenders, service providers and suppliers for either a waiver, reduction or deferment of payments. We formulated and implemented plans to achieve operational efficiencies and restructured certain parts of the business,” he added. Leeming said Sun International also used the


lockdown period to critically assess the group’s operational practices, systems, marketing and guest experience. “Several initiatives were undertaken which are


having and will have a positive impact on the group’s future results,” he stressed. Measures Sun International took in responding to


the pandemic included: • Addressing short-term liquidity risks, including an up to 60% reduction in payroll costs during lockdown, deferring all capital investment other than critical spend and announcing the closure of the Naledi Sun and Carousel casinos;


• Accelerating the disposal of certain non-core assets;


• The successful conclusion of a R1.2 billion rights offer; and,


• Disposing of the group’s interest in Sun Dreams in Latin America, which became effective on October 31, 2020. “The capital raise as a result of the rights offer


and the proceeds from the disposal of Sun Dreams has improved our liquidity position and significantly strengthened the group’s balance sheet,” Leeming said. “These actions and the various operational


initiatives which we have undertaken and implemented in the last 12 months have ensured that the group remains well placed to be able to deal with the current and future Covid-19 challenges and has strongly positioned the group to recover and grow into the future.”


SoftSwiss Enters Africa with Nigerian Licence


Online gambling software developer SoftSwiss is to expand into the African market for the first time after it secured a new licence in Nigeria. The permit will allow


SoftSwiss to work with licensed operators in Nigeria and deploy its igaming software in Africa’s most populous country. SoftSwiss said the new licence forms part of its


ongoing strategy to focus on growth in regulated markets around the world. “Entering the Nigerian market marks an


exceptional turning point for SoftSwiss, as we’re expanding our global presence to a brand new continent,” the supplier’s founder Ivan Montik said. “Nigeria is considered one of the most fast-paced


igaming markets in terms of growth and we cannot wait to begin providing our services there. “Nigeria is a great achievement for us and we’re


planning on moving even further into other regulated markets.”


Nigeria’s Newest Sportsbook Plans Rapid African Expansion


Nigeria’s newest entrant into this vibrant market, Soloti Gaming Limited has recently obtained its operation licences from the Nigerian National Lottery Board and the Lagos State Lottery Board, and has promised to revolutionise the sports betting industry in Nigeria. The company has also announced its flagship brand Frapapa, plans expansion with a multi-jurisdictional presence in Africa. Frapapa will utilise BtoBet’s Neuron 3 platform at the core of its operations on both its digital and extensive retail network. Soloti Chairman, Adebayo Tade, expressed


optimism at the consistent growth trend in the gaming industry in Africa and Nigeria, saying, “We have over the last two years been conducting extensive research on the gaming industry in Africa, notably West Africa, and we believe it is time to revolutionise and reposition the gaming industry in Nigeria, offering innovative and more strategic outcomes beneficial to the over 70 million punters in the Nigeria Gaming industry.” Also speaking on FRAPAPA, the Chief Operating


Officer, Layi Olayinka, said, “I am super excited to be part of the highly innovative team of experts coming to the Nigerian gaming industry. Our vision is clear; we want to create a gaming framework that provides a superior betting platform with impactful, life-changing offerings and more.


APRIL 2021 23


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