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Condensed Unaudited Consolidated Interim Financial Statements for the six months ended 30 September 2022
Southern Sun Limited (formerly Tsogo Sun Hotels Limited)
(Incorporated in the Republic of South Africa)
(Registration number 2002/006356/06)
Share code: SSU ISIN: ZAE000272522
(Southern Sun or the group or the company)
SHORT-FORM ANNOUNCEMENT: CONDENSED UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2022
Financial results
- Six month occupancy at 46.0%
- Total Ebitdar at R468 million
- Total adjusted headline profit R26 million
- Net debt reduced to R2.5 billion
Supplementary information
2022 2021(1) Change
Unaudited Unaudited on
Income (Rm) 2 481 919 1 562
Rooms revenue 1 318 524 794
Food and beverage revenue 567 242 325
Property rental income 68 30 38
Other revenue(2) 528 123 405
Ebitdar (Rm)(2),(3) 449 139 310
Attributable profit/(loss) for the year (Rm)(2),(3) 335 (168) 503
Basic and diluted profit/(loss) per share (cents) 22.6 (11.0) 33.6
From continuing operations 22.0 (10.9) 32.9
From discontinued operations 0.6 (0.1) 0.7
Basic and diluted headline profit/(loss) per share (cents) 22.7 (10.8) 33.5
Basic and diluted adjusted headline profit/(loss) per share (cents) 1.2 (10.9) 12.1
(1) Restated for discontinued operations being the proposed sale of the group's entire 75.55% shareholding
and shareholder loan claims in Ikoyi Hotels Limited which owns the Southern Sun Ikoyi hotel in
Lagos, Nigeria.
(2) The once-off payment of R399 million received by the group from Tsogo Sun Gaming Limited on implementation
of the Separation Agreement on 30 September 2022 (Separation Payment) has been included in other revenue
in line with IFRS 15 and consequently, the after tax impact of R313 million is included in attributable
earnings and headline earnings. The Separation Payment is exceptional in nature and outside of the
group's normal business operations and accordingly, has been excluded from Ebitdar (pre-tax) and adjusted
headline earnings (post-tax).
(3) Net business interruption proceeds of R162 million received in the six-month period ended 30 September 2021,
has been excluded from revenue in line with IFRS 15 and included in Ebitdar. The after-tax impact of
R118 million has been included in attributable earnings, headline earnings and adjusted headline earnings.
This is consistent with the treatment of the insured losses which were not adjusted out of these performance
measures.
Operational review
Trading levels during the first six months of the 2023 financial year have been encouraging with occupancy increasing
to 46.0% from 21.9% in the prior comparative period and the group returning to profitability with adjusted headline
earnings of R17 million and free cash flow of R191 million from continuing operations. During October 2022, the group
achieved an occupancy of 59.2% across its owned hotel portfolio, the first time this level has been reached since
March 2020 when the group initiated the deactivation of the majority of its portfolio in response to government
regulation aimed at minimising the impact of the pandemic.
In the short term, the group remains optimistic that trading levels will continue to improve throughout the summer
season. Having recently completed our SunBreaks campaign, some interesting trends were highlighted. Sale bookings for
Cape Town exceeded 2019 levels which we believe is due to the cost of flights - guests are booking early to secure
cheaper flight prices. Sale bookings for KwaZulu-Natal, however, were below 2019 levels and indicated that there is
still a trend towards shorter lead-time bookings, particularly where holiday destinations are closer and travel costs
are affordable.
In the medium term and in the face of inflationary cost pressures, the group will continue to focus on maintaining the
cost efficiencies that were achieved through the restructuring that took place in response to the pandemic. As cash
generation improves, the intention is to complete certain of the refurbishment projects that were placed on hold,
particularly at flagship properties so that we avoid downtime during high-demand periods.
Short-form announcement
This short-form announcement is the responsibility of the board of directors of Southern Sun. This short-form
announcement is a summary of the full announcement released on SENS on 24 November 2022 and does not include full
or complete details. The information contained in this announcement has not been reviewed or reported on by the
company's auditors.
The full announcement is available on the company's website www.southernsun.com/investors/financial-reports and can
also be accessed using the following JSE link: https://senspdf.jse.co.za/documents/2022/jse/isse/SSUE/Interim22.pdf
A copy of the full announcement may be requested from companysecretary@southernsunsun.com or the sponsor, Investec Bank.
Any investment decisions by shareholders should be based on a consideration of the full announcement, which shareholders
are encouraged to view on SENS and on the company's website.
The condensed unaudited consolidated interim financial statements for the six months ended 30 September 2022 have not
been reviewed and reported on by the group's external auditors, PricewaterhouseCoopers Inc. This announcement contains
forward-looking statements and information in relation to the group. By its very nature, such forward-looking statements
and information require the company to make assumptions that may not materialise or that may not be accurate. Such
forward-looking information and statements involve known and unknown risks, uncertainties and other important factors
beyond the control of the company that could cause the actual performance or achievements of the company to be materially
different from any future results, performance or achievements expressed or implied by such forward-looking information
and statements. Past share performance cannot be relied on as a guide to future performance. Forward-looking statements
speak only as at the date of the announcement and no statement is intended to be a profit forecast. Forward-looking
statements are the responsibility of the board and have not been reviewed and reported on by the external auditors in
accordance with ISAE 3400 - The Examination of Prospective Financial Information.
24 November 2022
JSE Equity Sponsors
Investec Bank Limited
www.southernsun.com
Date: 24-11-2022 10:00:00
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