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Southern Sun Limited (SSU) investor relations material

Southern Sun Limited H2 2025 earnings summary

Complete event summary combining all related documents: earnings call transcript, report, and slide presentation.
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H2 2025 earnings summary21 May, 2025

Executive summary

  • Achieved record profits for FY2025, with income up 9% to R6.6bn and EBITDAR/EBITDA up 14%, driven by strong trading in Western Cape and Gauteng, and successful hotel refurbishments.

  • Adjusted headline earnings per share rose 34% to 75.6c; dividends per share doubled to 25.0c, reflecting a new policy to pay out one-third of earnings.

  • Net income reached R1bn, up 30% year-over-year; net debt reduced to R266m from over R1bn, leaving the company nearly ungeared.

  • Occupancy increased to 60.8% from 58.6%, with average room rate up to R1,463 and RevPar up to R890.

  • KwaZulu-Natal and Mozambique underperformed due to political and economic disruptions, while Cape Town and Gauteng benefited from inbound travel and events.

Financial highlights

  • Total income up 9% year-over-year to R6.6bn; rooms revenue up 10% to R4.4bn; food & beverage revenue up 6% to R1.6bn.

  • EBITDAR/EBITDA margin improved to 33% from 31%; operating profit increased 12% to R1.56bn.

  • Adjusted headline earnings grew 30% to R1.0bn; basic EPS up to 76.4c; adjusted HEPS up 34% to 75.6c.

  • Free cash flow of R952m generated; cash and equivalents at R396m with R1.8bn in undrawn facilities.

  • Net interest-bearing debt reduced by R758m to R266m; leverage ratio at 0.1x; interest cover at 12.5x.

Outlook and guidance

  • Management expects further recovery in occupancy, especially in underperforming regions, with long-term targets in the mid-to-high 60s.

  • Dividend payout ratio to be maintained at ~33% of AHEPS; share buybacks to continue if price remains below cost of debt.

  • Maintenance CapEx guidance above R500m annually, with flexibility to delay projects based on market conditions.

  • No major offshore expansion planned; focus remains on South Africa and internal strategy.

  • Tailwinds include softening inflation, suspension of load shedding, and potential visa regulation easing for key markets.

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Frequently asked questions

Southern Sun Limited, previously known as Tsogo Sun Hotels Limited, is a leading entity in the hospitality industry, focusing on the ownership, management, and operation of hotels. Its primary operations are based in South Africa, the Seychelles, and the Middle East. The company's business activities are categorized into several segments: accommodation services, catering services at 27%, real estate leasing, and other operations. Southern Sun Limited is headquartered in Sandton, South Africa, and its shares are listed on the Johannesburg Stock Exchange.

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