Southern Sun (SSU) investor relations material

Executive summary

• Revenue increased 9% to R7.2bn, driven by robust domestic trading and improved occupancy, with South African operations up 10% and offshore income down 4% due to temporary closures and challenging conditions.

• EBITDA/EBITDAR grew 12%, with margin improving to 34%; adjusted earnings per share rose 19% to 90.1c.

• Dividend per share increased 20% to 30.0c, and share buybacks reduced share count by 37–40 million.

• Major refurbishments and targeted capital allocation supported volume and rate growth, especially in key properties post-upgrade.

• Maintained a stable portfolio of 95 hotels and nearly 17,000 rooms, with ongoing renovations and upgrades.

Financial highlights

• Net income attributable to equity holders grew 21% to R1.24bn; profit for the year at ZAR 1.2 billion.

• Free cash flow exceeded ZAR 900m after R600m in maintenance capex; net cash position of ZAR 86m at year-end, down from ZAR 266m debt last year.

• Dividend payout of ZAR 344m and share buybacks totaling ZAR 359m.

• Food and beverage income up 9% to R1.7bn; property rental income up 8% to R294m.

• CapEx increased from ZAR 450m to ZAR 600m, with major refurbishments in Seychelles and other key properties.

Outlook and guidance

• Maintenance CapEx expected to remain at ZAR 600m for the next two years, then drop to ZAR 500m long-term.

• Expansion projects include a ZAR 1.5bn Cape Town JV, ZAR 1bn Beverly Hills redevelopment, and ongoing Durban beachfront investments.

• Anticipates continued strong cash generation, with potential for further buybacks or special dividends if no major acquisitions occur.

• Offshore segment expected to rebound with full-year Seychelles trading and improved Mozambique performance.

• Medium-term recovery in occupancies and rate growth expected, but risks from Middle East conflict and rising oil prices may impact economic growth and inflation.