Tsogo Sun Gaming profit down 67% in wake of lockdown

Montecasino
Montecasino
  • Operating profit is down 67%
  • Earnings per share are 87% down (19.6 cents down)
  • Company ready to trade under enhanced safety regulations

Tsogo Sun Gaming business has taken a significant knock from the impact of the extended lockdown, with the group reporting a 67% drop in operating profit for the year to end of March.

The company, which unbundled its hotel interests in 2019, said it shut its operations on March 25, following the announcement of a national lockdown by President Cyril Ramaphosa to curb the spread of Covid-19.

Financial statements released on Tuesday showed that operating profit was down 67% to R1 billion, while earnings per share dipped 87%.

The group said it is currently faced with uncertainty over when its various divisions, including casinos, limited payout machine and bingo, will be able to trade, further noting that the Covid-19 virus and restrictions on trade had negatively impacted the business. Gaming establishments across the country, including casinos, remain closed under the current Level 3 of the lockdown.

"The business lost an estimated R2 billion in revenue, and debt increased to R12 billion  since year end," it said.

"Lenders have accordingly agreed to waiver the September 2020 covenant measurement period and to provide liquidity, by rolling up interest of R0,75 billion which will accrue until the 2021 year end, repayable within three years."

According to the company, trade prior to Sunday, 15 March 2020 - when President Cyril Ramaphosa announced a state of national disaster - was "solid, and the group was on track to show growth on the prior year." 

Total income for the year was only 1% higher than the previous year at  R11.7 billion, and a final dividend per share was not declared.

The company said it had developed enhanced hygiene and social distancing measures, which will enable it to operate successfully once it's allowed to do so.

The hospitality industry has been hit the hardest by the restrictions imposed by the government to curb the spread of Covid-19, with industry players warning of financial and job losses as a result the prolonged lockdown.

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