Hotel and gaming group Sun International said on Thursday that overall revenue growth for the March quarter was seven percent over last year despite Easter falling in this quarter as against the final quarter last year.

Revenue for the quarter was R1.887-billion. Revenue for the nine months ended March was up 11 percent at R5.684-billion.

Casino revenues for the March quarter was only six percent ahead of last year at R1.440-billion - and up 11 percent at R4.371-billion for the nine months ended March - which the group said reflected the difficult conditions affecting consumer spending in South Africa.

GrandWest and Sibaya achieved growths of nine percent and 12 percent respectively for the March quarter while Carnival City and Boardwalk reflected declines in revenue compared to last year of three percent and four percent respectively.

"Encouraging rooms revenue growth of 15 percent was achieved for the quarter and the average room occupancy of the group's hotels and resorts for the quarter at 78 percent was three percentage points up on last year.

"The slow growth in casino revenues and the decline in GrandWest's margin as a result of the enlarged casino floor, resulted in a minor decline in the overall group EBITDA margin and consequently EBITDA growth of six percent was marginally behind the revenue growth of seven percent," the group said.

EBITDA for the March quarter amounted to R704-million and for the nine-month period R2.093-million - an 11 percent increase.

The group cautioned that trading conditions at Sun International casinos in South Africa for the remainder of the year were expected to remain difficult as a result of the pressures on disposable income. However this would be offset to some extent by stronger rooms revenue growth, it said.

Commenting on developments, Sun International said that the 98 room Golden Valley Lodge at the Golden Valley Casino in Worcester opened successfully in March 2008. The Carnival City Multi-level parkade construction is on schedule for completion during June 2008.

The second phase of the R260-million refurbishment at the Sun City Main Hotel commenced in February 2008 with completion anticipated in November 2008.

On its Wild Coast Sun casino licence which expires on 31 August 2009, the group said it had submitted its application for a new casino licence which would include a R340-million upgrade and enhancement to the resort. The award of the licence to the successful bidder is currently scheduled for October 2008.

Turning to its international operations, the group said that construction of the casino project located south of Santiago in Chile was progressing according to plan with the casino component on schedule to open to the public in October 2008. "The retail and entertainment components remain scheduled for completion at the end of calendar 2008 and the hotel is due to open in May 2009. The group is awaiting the approval of its partners by the country's gaming regulator."

The group is currently managing the Federal Palace Towers hotel on Victoria Island in Nigeria and is nearing completion of the furnishing of the recently renovated 150-room Federal Palace Hotel which is anticipated to open early June 2008. The final terms of the gaming licence are being considered by the Nigerian authorities whereupon the licence is planned to be issued and the refurbishment of the 230-room Federal Palace Towers hotel and the construction of the new casino can commence, Sun International added.

I-Net Bridge