Hotel group Southern Sun, formerly Tsogo Sun Hotels, is expecting a bumper interim results payday, with headline earnings more than tripling.
This is thanks to the tourism industry recovering after the lifting of Covid-19 restrictions, which dampened travel worldwide, the group said on Friday in a trading update for the six months to end-September.
“The improvement in earnings is mainly driven by an increase in revenue across the business, due to a return to normalised travel patterns and conferencing as well as the lower base in the prior comparative period ... as a result of the third wave of Covid-19 infections and the violent protests and civil unrest experienced during June and July 2021 in Gauteng and KwaZulu-Natal and the resultant impact on travel,” the company said.
Southern Sun, which is valued at R7.29bn on the JSE and runs more than 100 hotels in Africa and the Middle East, is the biggest player in SA’s leisure sector. Offerings range from hotels catering to lower-income clients to the upper end, including the Mount Grace Hotel & Spa in Magaliesberg and 54 on Bath in Rosebank, Johannesburg.
When Covid-19 hit, Tsogo closed many of its hotels — except those offering rooms for people in quarantine — operating a skeleton staff and deferring pay increases and bonuses.
Revenue is expected to be R1.5bn-R1.68bn higher compared with the prior comparative period’s R954m, but this includes a one-off payment of R399m from Tsogo Sun Gaming.
It was announced earlier this year that Tsogo Sun Gaming would pay Southern Sun Hotels to take over the management and licensing agreements of 15 hotels. Southern Sun Hotels often manages the hotels on Tsogo Sun Gaming premises on their behalf.
Tsogo Sun unbundled its hotels business in 2019, with Tsogo Sun Gaming and Tsogo Sun Hotels being listed separately on the JSE.
Southern Sun expects headline earnings per share, a profit measure that strips out one-off items, to be 33.2c-35.2c, compared with the prior period’s headline loss per share of 10.9c.
On Friday, its share price was 3.04% higher at the close at R4.75 after leaping as much as 10.4% in earlier trade.
The company will publish its interim results on Thursday.
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