Southern Sun Limited · JSE:SSU
Southern Sun — Tsogo Sun Hotels — H1 F2022 Earnings Presentation
29 slides from Southern Sun's earnings presentation, November 2021
Slide 1: Tsogo Sun Hotels Investor Presentation November 2021
F’22H1 • Six-month occupancy at 21.9% (F’21 H1: 5.2%) • Ebitdar at R145m (including R162m net insurance proceeds) • Net debt maintained at R3.0bn • R1.3bn in liquidity maintained TSOGO SUN HOTELS INVESTOR PRESENTATION November 2021
Slide 2: Disclaimer
DISCLAIMER Certain statements in this document may constitute ‘forward looking statements’. Such forward looking statements reflect the company’s beliefs and expectations and involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance o
Slide 3: Group Structure
GROUP STRUCTURE Public 41% 59% 100% 100% SOUTH AFRICA OFFSHORE • Owned, managed • Owned, managed and leased hotels and leased hotels • UK Investments 25% • Manco 1
Slide 4: Board of Directors
BOARD OF DIRECTORS Executive Directors § Marcel von Aulock – CEO § Laurelle McDonald – CFO Non-Executive Directors § Johnny Copelyn – Chairman § Rob Nicolella Independent Non-Executive Directors § Mohamed Ahmed – Lead Independent § Chris Gina § Moretlo Molefi § Jabulani Ngcobo § Cornelia September 2
Slide 5: Operated Portfolio
OPERATED PORTFOLIO LUXURY | 54 Arabella ccony russ MOUNT SCE 2 mes 0 PALAZZO INTERCONTINENTAL AZ SANDTON SUN WNCOAMT owes FULL SERVICE Y Yg e Southern oat RESORTS Garden Court THE EDWARD ff —y— Holiday Inn ECONOMY © stayeasy- hr HOTELS © TSOGO SUN HOTELS
Slide 6: Portfolio by Rooms
PORTFOLIO BY ROOMS PORTFOLIO BY NUMBER OF ROOMS, BRAND AND REGION (EXCLUDING RBH AND IHL IN THE UK) Land & Freehold & Building Tsogo Sun 3rd party Brand Land lease Lease Owned Total Gaming Owner Total Internally managed Luxury Portfolio 430 557 987 411 138 1 536 Southern Sun 3 956 366 4 322 723 24 5
Slide 7: Group Financial Structure – Hotel Ownership
GROUP FINANCIAL STRUCTURE – HOTEL OWNERSHIP Freehold title, Land lease or Land & building lease § 74 hotel income statements contribute to group revenues and expenses (Sun1 Beaufort West lease terminated effective 30/04/2021) § Internal management fees are paid to Manco which eliminate on consolidat
Slide 8: Group Financial Structure – Hotel Ownership Continued
GROUP FINANCIAL STRUCTURE – HOTEL OWNERSHIP CONTINUED Leased by third-party management companies § 5 hotels managed by external parties remain investment properties on the group balance sheet as at 30 September 2021 § Rental income earned from these 5 hotels is reflected as rental income in the grou
Slide 9: Group Financial Structure – Hotel Management
GROUP FINANCIAL STRUCTURE – HOTEL MANAGEMENT Tsogo Sun Gaming § 17 hotels owned by Tsogo Sun Gaming and run for their account § Managed by Tsogo Sun Hotels with the management fee income recognised in Manco Third-party owned § 15 hotels owned by third parties and run for their account (includes the
Slide 10: Review of Operations
REVIEW OF OPERATIONS § The interim period under review was marred by the severe third wave of Covid-19 infections during June and July 2021 which resulted in level 4 lockdown restrictions, the highest instituted since the beginning of the pandemic § The banning of alcohol sales as well as domestic l
Slide 11: Review of Operations
REVIEW OF OPERATIONS § Thanks to the group’s distribution and ability to co-ordinate large sporting events, we were able to secure the rights as the sole accommodation provider for the Castle Lager Lions Series tour to South Africa, the timing of which was ideal as it offset some of the revenue shor
Slide 12: Corporate Activity
CORPORATE ACTIVITY Investment Property in Hospitality § Marriott vacated the Protea Hotel Victoria Junction in mid-October 2021. The group has closed the hotel and plans to re-open it as a Garden Court in 2022 § As a consequence, this hotel will transfer from investment property to owner-occupied pr
Slide 13: Financial Overview
© TSOGO SUN FINANCIAL OVERVIEW HOTELS
Slide 14: Quarterly Performance (Rm)
QUARTERLY PERFORMANCE (Rm) Q1 Q2 Total Revenue F’22 H1 469 490 959 F’21 H1 58 277 335 Change on F’21 H1 411 213 624 Ebitdar F’22 H1 (39) *184 145 F’21 H1 (160) (46) (206) Change on F’21 H1 121 230 351 * Includes net insurance proceeds of 162 162 Adjusted earnings F’22 H1 (172) *10 (162) F’21 H1 (216
Slide 15: South Africa System-wide Portfolio – Trend in Rooms Sold
SOUTH AFRICA SYSTEM-WIDE PORTFOLIO – TREND IN ROOMS SOLD 3rd wave 350 000 70% 300 000 60% 250 000 50% 200 000 40% Rooms sold 150 000 30% 100 000 20% 50 000 10% 0 0% Apr Apr May May Jun Jun Jul Jul Aug Aug Sep Sep Oct Oct n F'22F'20 Actual Actual 117377 239 952 112090 237 361 25193186 117 26255886 28
Slide 16: Income Statement | F'22 H1 vs F'21 H1 (Rm)
INCOME STATEMENT | F’22 H1 VS F’21 H1 (Rm) F’22 F’21 H1 H1 Change on Income 959 335 624 Rooms revenue 548 121 427 Food & beverage revenue 257 47 210 Property rental income 30 27 3 Other income 124 140 (16) F’22 F’21 Overheads (976) (541) (435) Owned stats H1 H1 Insurance proceeds (net) 162 - 162 Occ
Slide 17: Income Statement (Rm) Continued
INCOME STATEMENT (Rm) CONTINUED F’22 F’21 H1 H1 Change on Loss before interest and taxation (b/f) (50) (44) (6) Finance costs (net) (178) (184) 6 Finance costs (net) (114) (119) 5 Finance costs – IFRS16 (64) (65) 1 Share of earnings/(loss) of associates & joint ventures 6 (109) 115 Income tax 54 91
Slide 18: Reconciliation to Adjusted Headline Earnings (Rm)
RECONCILIATION TO ADJUSTED HEADLINE EARNINGS (Rm) F’22 H1 F’21 H1 Gross Net Gross Net Attributable loss(1) (162) (176) Loss on disposal of PP&E 1 1 - - Gain on disposal of investment in MAIA - - (355) (355) Share of associates’ headline earnings adjustment - - 90 90 Headline loss(1) (161) (441) Tran
Slide 19: Segmental Analysis (Rm)
SEGMENTAL ANALYSIS (Rm) Income Ebitdar Ebitdar margin % F’22 H1 F’21 H1 F’22 H1 F’21 H1 F’22 H1 F’21 H1 Manco (1) 41 20 145 (51) * * Rental income 7 3 7 3 100 100 Trading income – HPF 46 - (25) - (54) - Internally managed 762 264 13 (126) 2 (48) Coastal 412 91 23 (89) 6 (98) Inland 251 123 (17) (36)
Slide 20: Cash Flow (Rm)
CASH FLOW (Rm) F’22 F’21 H1 H1 Ebitdar per income statement 145 (206) Property rentals (72) (51) Move in working capital adjusted for non-cash and exceptional items 104 158 Cash generated/(utilised) from operations 177 (99) Net finance costs paid (excluding IFRS16 adjustments) (114) (119) Taxation p
Slide 21: Cash Flow (Rm) Continued
CASH FLOW (Rm) CONTINUED F’22 F’21 H1 H1 Free cash inflow/(outflow) (b/f) 43 (276) Disposal proceeds 1 - Investment activities – expansion capex - (16) Associates, joint ventures, loans and investments 2 467 Net cash surplus 46 175 Currency 2 (7) Move in net IBD 48 168 Opening net IBD (3 069) (3 252
Slide 22: Investment Activities (Rm)
INVESTMENT ACTIVITIES (Rm) F’22 F’21 H1 H1 Investment activities - 16 Riverside Conference Centre - 16 Maintenance capex 17 18 Hotel major refurbishments: Paradise Sun 2 - Garden Court Marine Parade 1 - Southern Sun Cape Sun - 2 Resorts (Drakensburg Sun, Sabi River Sun and The Hazyview Sun) 2 - Gard
Slide 23: Interest Bearing Debt (Rm)
INTEREST BEARING DEBT (Rm) F’22 H1 F’21 H1 External debt – Offshore (US$ based) 698 814 External debt (Rand based) 2 831 2 578 Prepaid borrowing costs (5) (7) Gross IBD 3 524 3 385 Cash on hand – Hotels SA (427) (336) Cash on hand – Hotels Offshore (62) (43) Net IBD 3 035 3 006 Analysed as: Hotels S
Slide 24: Financial Covenant Waivers and Facilities
FINANCIAL COVENANT WAIVERS AND FACILITIES § The group has comfortably met revised Ebitdar and liquidity covenants for the June 2021 and September 2021 measurement periods § Lenders have approved the covenant waivers for March 2022 on the basis that the revised covenants continue to be measured. Liqu
Slide 25: Financial Covenant Waivers and Facilities
FINANCIAL COVENANT WAIVERS AND FACILITIES § Mozambican Central Bank approval was obtained on 4 June 2021 for the refinancing of US$25m US Dollar denominated Mozambican facilities for further five years with effect from August 2021 § The US$1.7m MZN denominated Mozambican facility due in March 2022 i
Slide 26: Group Facility Profile
GROUP FACILITY PROFILE 800 399 600 500 300 378 373 229 20 300 230 201 200 194 103 28 SS Moz HPF TSI HPF HPF SSA HPF HPF HPF SSA SS Ikoyi SS Moz Mar 22 Apr 22 Jun 22 Aug 22 Dec 22 Feb 23 Mar 23 Mar 24 Sep 24 Feb 25 Dec 25 Jul 26 Utilised facility Facility headroom 24
Slide 27: Prospects
PROSPECTS § While we are encouraged by the recent upward trend in trading, we are acutely aware that we are still trading at only 50% of system-wide rooms sold prior to Covid-19 and at occupancies far below the group’s long-term average § It is clear that Covid-19 will remain with us for the foresee
Slide 28: Prospects
PROSPECTS § Should there be signs of an upturn in demand the group has the ability to reactivate the remainder of closed hotels which now make up only 19% of total room stock in order to capture the available business § Hotels that remain closed are concentrated in the Cape Town and Sandton nodes in
Slide 29: Thank You
©MTSOGO SUN THANK YOU HOTELS