Southern Sun (SSU) H1 2025 earnings summary

Executive summary

• Revenue for the half-year increased 6% to R2.97bn, with Ebitdar up 10% to R822m and adjusted HEPS up 39% to 25.0c per share.

• Net debt reduced to R995m, reflecting strong cash generation and disciplined capital allocation.

• Trading volumes and occupancy improved, with September 2024 occupancy reaching 68.2%, driven by both international and domestic demand.

• Portfolio and group structure remain unchanged, with stable board and brand presence.

• Majority of profits and cash flow expected in the second half due to seasonality.

Financial highlights

• Rooms revenue grew 7% to R1.99bn, supported by a 3% increase in average room rate and 2.6pp rise in occupancy to 58.9%.

• Food and beverage revenue rose 4% to R760m; property rental income up 21% to R114m.

• Operating costs increased 5% year-over-year, with Ebitdar margin improving to 28%.

• Adjusted headline earnings rose 31% to R334m; attributable profit up 30% to R331m.

• Free cash inflow from operations was R154m, with R215m spent on maintenance capex.

Outlook and guidance

• Forward bookings for December and early 2024 are strong, with September 2024 occupancy at 68.2%.

• Easing inflation, interest rate cuts, and visa simplification expected to support tourism and growth.

• Refurbishment projects to continue, with flexibility to adjust based on market conditions.

• Major events like the G20 Summit and Mining Indaba expected to drive demand.

• Dividend payout ratio expected to rise toward 30-35% over time.