Tsogo Sun Posts Six Months Earnings
Tsogo Sun Holdings, South Africa’s premier hotel and gambling operator, rolled out numbers for the six month period ending September 2015. While the group’s adjusted headline earnings per share rose 9% in the period, it nevertheless warned that future earnings might not be as positive.
The chief executive officer of Tsogo Sun Holdings Marcel von Aulock, said that the business was under pressure due to an economy that was subdued at best.
“We expect trading conditions to remain under pressure due to the ongoing macro-economic conditions and weaker consumer sentiment,” he said.
“Overall industry occupancies have improved marginally for the period, but were adversely impacted by the visa regulations, which constrained growth,” added von Aulock.
Tsogo Sun’s properties outside South Africa’s borders performed very well, with total revenue in countries such as Nigeria, Kenya and Mozambique climbing 34% when compared to the previous six months.
Von Aulock said that these external properties performed well due to several reasons, including the re-opening of the Southern Sun Maputo which had been closed for refurbishment in the previous six months, as well as the strengthening of the rand against the US Dollar. In addition, more tourists were travelling to Africa now that the ebola epidemic was under control.
The total income for Tsogo Sun in the six month period increased by 7% to R5.9 billion. In addition, operating profit rose by 16% to R1.6 billion when compared to the same period in the previous year.
In other Tsogo Sun news, the group said that it had entered into an agreement with South Africa’s Hospitality Property Fund. Under the terms of the deal, Hospitality will purchase 10 hotels from Tsogo in exchange for shares. This will increase Tsogo Sun’s stake in Hospitality from its existing 27% to over 50%.
The ten properties that will be acquired by Hospitality Property Fund are as follows: Garden Court South Beach; Garden Court O.R.Tambo; Garden Court Milpark; Garden Court Polokwane; Stay Easy Century City; Garden Court Kimberley; Southern Sun Newlands; Stay Easy Rustenburg; Southern Sun Bloemfontein and Sun Square Cape Town.
According to Reuters, Tsogo Sun Holdings paid an interim dividend of 31c per share – an increase of 7%.
In July this year, Tsogo Sun announced that it had cancelled players to purchase a minority stake in two casinos operators by its rival, Sun International – namely GrandWest Casino and Worcester Casino.