Sun International Targets Leadership in South Africa’s iGaming Arena Amid H1 Growth
Sun International is making significant strides in South Africa’s iGaming market, as highlighted by its H1 financial results. CEO Ulrik Bengtsson emphasized that mergers and acquisitions might play a crucial role in this endeavor.
The gaming and hospitality giant has reported a revenue uptick due to robust online performance, offsetting declines in other sectors. For the six months ending June 30, the revenue reached ZAR6.19 billion (approximately $353 million), marking a 3% increase from ZAR6 billion in H1 of the previous year.
Among its various segments, Sunbet, the company’s online platform, stood out with a remarkable 70% year-on-year revenue growth, contrasting with the relatively modest gains in traditional land-based operations.
Bengtsson remarked on the potential for growth in iGaming, saying, "As we continue to gain momentum, increasing our market share is a priority. Mergers and acquisitions may be part of our strategy to scale and diversify."
He elaborated on Sunbet’s growing prominence in the competitive landscape, stating, “Our competitive edge lies in our ability to leverage the group’s resources to enhance our services, ultimately aiming to establish Sunbet as the trusted premier online gaming operator in Southern Africa."
Surge in Online Slots Revolutionizes Revenue
Delving deeper into the online sector, earnings from online slots surged to ZAR871 million, representing a significant 70% growth compared to ZAR512 million in H1 of last year. Overall, all iGaming verticals experienced an uptick, with deposits increasing by 105% and new depositors rising by 44%. Active unique players on Sunbet also rose by 71%.
However, the urban casino segment faced challenges, seeing a slight revenue decline of 1% to ZAR3.24 billion. In response, Sun International is reassessing its approach to bolster stability in the long term.
The company stated, "We are focusing on optimizing our casino operations, enhancing service quality, innovating our products, and improving marketing efforts to convert foot traffic effectively. This strategy, combined with targeted customer acquisition and retention efforts, is expected to bolster revenue in the near future."
In the broader scope, revenue from resorts and hotels rose by 4% to ZAR1.32 billion, while revenue from physical slot operations saw a modest 2% increase to ZAR701 million. An additional ZAR60 million in revenue came from activities in Chile and other African nations, alongside the Table Bay Hotel, which is currently closed for renovations.
Financial Overview and Strategic Outlook
While expenditure rose in areas like staffing and taxes, the company managed to mitigate some losses through finance-related income. Operating profit fell 6% to ZAR1.12 billion, though pre-tax profits increased by 26% to ZAR1.06 billion. Net profits from ongoing operations soared by 37%, totaling ZAR804 million.
However, comparing these figures to the previous year shows discrepancies, particularly due to discontinued operations that contributed ZAR343 million in profit last year, compared to only ZAR8 million this year. Factoring in adjustments for listed shares and taxes, the final net profit was ZAR748 million, reflecting a 15% decline from the prior year.
Bengtsson stated, "Sun International is equipped with a diverse portfolio that presents clear avenues for growth. Our commitment to optimizing our urban casinos, capitalizing on the digital shift for Sunbet, and exploring selective expansion in the physical slot sector ensures we are well-positioned for sustainable growth."
Looking ahead, he noted, "We will continue to invest in infrastructure and service enhancements while pursuing growth opportunities in regulated African markets for Sunbet. Our focus remains on fostering free cash flow while maintaining disciplined capital allocation—striking the right balance between shareholder returns, business investment, and value-driven acquisitions."
Bengtsson, who took the reins in March, brings a fresh perspective to the group, ensuring it remains adaptive and resilient in the evolving gaming landscape.