In its latest financial report South African gaming giant Sun International stated that losses at its Monticello operation in Chile were responsible for the company missing an EBITDA performance in line with the previous year (EBITDA fell 2% for the six months ended 31 December 2008) while revenue increased by 6%. The company has resolved to preserve cash flows and not to declare an interim dividend in light of the funding requirements for Monticello, deteriorating trade conditions and the funding of casino licence applications for Wild Coast Sun and Boardwalk.

Sun International CEO David Coutts-Trotter said that comparable gaming revenue improved by 2% on last year and that the slower rate of growth was due to declining disposable incomes and consumer confidence. “GrandWest in Cape Town and Boardwalk in Port Elizabeth experienced particularly difficult trading conditions due to economic conditions in their specific local markets. Given deteriorating revenues, cost containments have been particularly focused at these operations.”

Construction of the US$236 million Monticello Casino and Entertainment World, located south of Santiago in Chile, continues. The casino (1500 slot machines and 80 tables) opened to the public in October 2008, just as the economic downturn became widespread, while the retail and entertainment components are scheduled for completion at the end of May and the hotel in August. Sun International will need to assist with the funding of certain concessionaires in respect of the fast food and children’s entertainment areas, due to the economic climate in Chile, which will marginally increase projected capital expenditure.

Adjusted headline earnings per share for the full year are expected to be below that achieved for 2008. Trading at the group’s gaming operations is expected to remain subdued, while global economic conditions will negatively impact hotels and resorts in the second half of the financial year. Coutts-Trotter concluded, “The board is committed to ensuring that the group has the appropriate capacity to fund future opportunities and will consequently review the final dividend in light of conditions prevailing at the time.” (E-03.05.09)

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