Sun International well positioned to see through a difficult year, says CEO

Sun International, a leading player in the leisure and hospitality industry, has faced significant challenges due to the ongoing impact of the global COVID-19 pandemic. The company reported an adjusted headline loss of 633 cents per share for the year ended December, a clear indication of the tough times faced by the industry. Despite the hurdles, there are signs of recovery as most operations have resumed trading. Sun International CEO, Anthony Leeming, in a recent interview with CNBC Africa, provided insights into the current situation and the company's outlook moving forward. Leeming acknowledged the ongoing challenges faced by the industry, stating that the company is still operating under restrictions, with some sectors such as conferencing, meetings, and exhibitions remaining non-operational. However, he expressed optimism about the company's ability to navigate through the difficulties of the year, citing the resilience shown in the face of previous challenges. Leeming highlighted the positive performance of the gaming and hospitality segments, particularly in terms of cash flow generation. This, coupled with cost-saving measures and margin improvements implemented during lockdown, has positioned the business well to weather the storm. One of the key factors driving the company's strong cash flows is the focus on efficiency and restructuring efforts. By streamlining operations and reducing costs, Sun International has been able to improve margins and enhance its overall financial position. While the journey towards recovery remains ongoing, Leeming emphasized the importance of maintaining a lean and efficient business model to sustain growth in the long run. When questioned about the prospect of bringing back workers once operations normalize, Leeming mentioned plans to rehire a portion of the workforce, particularly in conferencing-related roles. With a more flexible labor pool in place, the company is prepared to scale up staffing levels as demand picks up. While uncertainties remain regarding the future of conferencing and events, Sun International is actively engaging with government authorities to explore avenues for easing restrictions and reviving this crucial segment of the business. In terms of domestic travel, Leeming noted a positive trend in local leisure demand, with strong occupancies observed in key tourism destinations. The company is optimistic about the upcoming Easter period, anticipating robust demand and potential outperformance compared to pre-pandemic levels. By offering attractive rates and incentivizing local customers to explore domestic tourism opportunities, Sun International aims to capitalize on the resurgence in leisure travel. Regarding the company's operations in Eswatini and Nigeria, Leeming clarified that the decision to exit these markets is a long-standing strategic move and not solely driven by the current pandemic. While facing challenges in finalizing the exit due to regulatory hurdles, Sun International remains committed to divesting from these regions to focus on core markets. The CEO also touched upon debt restructuring efforts and outlined the company's target of maintaining a sustainable debt profile moving forward. In conclusion, Leeming highlighted the company's cautious approach to industry consolidation, emphasizing the need for a strong balance sheet and strategic growth initiatives. While acknowledging the value of Sun International's assets, he noted that the focus remains on organic growth opportunities, including expanding the LPM business and exploring the evolving vacation rental space. Despite the uncertainties and challenges posed by the pandemic, Sun International remains optimistic about its resilience and ability to navigate through a difficult year ahead.