SUI: SUN INTERNATIONAL LIMITED - Unaudited interim results announcement for the six month period ended 30 June 2017

SUI: SUN INTERNATIONAL LIMITED - Unaudited interim results announcement for the six month period ended 30 June 2017 Unaudited interim results announcement for the six month period ended 30 June 2017 Sun International Limited ("Sun International" or "the group" or "the Company") Registration number: 1967/007528/06 Share code: SUI ISIN: ZAE 000097580 UNAUDITED INTERIM RESULTS ANNOUNCEMENT for the six month period ended 30 June 2017 Condensed group statements of comprehensive income Period ended six months Unaudited Unaudited pro forma Audited 30 June 30 June 31 December R million 2017 2016 2016 Continuing operations Revenue 7 560 6 349 7 670 Other income - 18 - Consumables and services (798) (749) (920) Depreciation and amortisation (822) (600) (788) Employee costs (1 501) (1 238) (1 474) Impairment of assets (8) - (269) Levies and VAT on casino revenue (1 548) (1 267) (1 446) LPM site owners commission (141) (66) (146) Promotional and marketing costs (494) (368) (485) Property and equipment rentals (101) (122) (117) Property costs (358) (391) (380) Monticello purchase price differential - (48) - Other operational costs (782) (607) (823) Operating profit 1 007 911 822 Foreign exchange losses (12) (481) (82) Interest income 10 13 20 Fair value adjustment to put liability (162) - 247 Interest expense (515) (407) (542) Share of equity accounted profits 1 (14) 1 Profit before tax 329 22 466 Tax (198) (230) (256) Profit/(loss) for the period from continuing operations 131 (208) 210 Profit for the period from discontinued operations 1 32 4 Profit/(loss) for the year 132 (176) 214 Other comprehensive income Items that will not be reclassified to profit or loss Re-measurements of post-employment benefit obligations - 4 - Tax on re-measurements of post-employment benefit obligations - (1) - Items that may be reclassified to profit or loss Gross loss on cash flow hedges (19) (22) (50) Currency translation reserve (170) 15 (151) Total comprehensive (loss)/profit for the period (57) (180) 13 Minorities 190 (207) 109 Ordinary shareholders (58) 31 105 Profit/(loss) for the period 132 (176) 214 Minorities 91 (207) (235) Ordinary shareholders (148) 27 248 Total comprehensive (loss)/profit for the period (57) (180) 13 Discontinued operations 1 34 4 Continuing operations (149) (7) 244 Total comprehensive (loss)/profit (148) 27 248 Headline earnings and adjusted headline earnings reconciliation Period ended six months Unaudited Unaudited pro forma Audited 30 June 30 June 31 December R million 2017 2016 2016 (Loss)/profit attributable to ordinary shareholders (58) 31 105 Net (profit)/loss on disposal of property, plant and equipment - 21 (9) Profit on disposal of shares in associates (27) (18) - Impairment of assets 8 - 269 Tax relief/(expense) on the above items 2 53 (48) Minorities' interest on the above items (2) (2) (28) Headline (loss)/earnings (77) 85 289 Straight-line adjustment for rentals 9 11 10 Pre-opening expenses 40 15 4 Transaction costs - 33 4 Restructure and related costs 15 - - Monticello purchase price adjustment - 48 - Amortisation of Dreams S.A. intangible assets raised as part of the PPA 73 18 104 Foreign exchange losses on intercompany and minority loans 12 467 80 Interest on Time Square Note 22 - 43 Discount on Tsogo settlement - - 20 Share-based payments expense 8 - - Fair value adjustment on put options 162 - (247) Tax on the above items (36) (52) 42 Minorities' interest on the above items (36) (353) (111) Reversal of the Sun International Employee Share Trusts' consolidation(i) 2 2 3 Other 12 18 (9) Adjusted headline earnings 206 292 232 (i) The consolidation of the Sun International Employee Share Trust is reversed in the calculation of adjusted headline earnings as the group does not receive the economic benefits of the Trust. Cents Cents Cents per share per share per share Earnings/(loss) per share basic (59) 32 107 diluted (59) 32 107 Dividends per share - 135 - Diluted adjusted headline earnings per share 198 280 223 Condensed group statements of financial position Period ended six months Unaudited Unaudited pro forma Restated 30 June 30 June 31 December R million 2017 2016 2016 ASSETS Non-current assets Property, plant and equipment 17 978 16 984 17 329 Intangible assets 2 669 3 251 2 987 Equity accounted investment 17 15 16 Available-for-sale investment 48 48 48 Loans and receivables 83 23 24 Pension fund asset 33 36 33 Deferred tax 402 365 862 21 230 20 722 21 299 Current assets Accounts receivable and other 1 498 2 036 1 473 Cash and cash equivalents 1 060 1 301 1 123 2 558 3 337 2 596 Non-current assets held for sale 76 169 170 Total assets 23 864 24 228 24 065 EQUITY AND LIABILITIES Capital and reserves Ordinary shareholders' equity before put option reserve 2 340 2 703 2 379 Put option reserve (4 799) (5 252) (4 651) Ordinary shareholders' equity (2 459) (2 549) (2 272) Minorities' interest 2 907 3 671 2 936 448 1 122 664 Non-current liabilities Deferred tax 251 343 820 Borrowings 11 292 9 980 10 731 Other non-current liabilities 966 896 916 Put option liability 4 799 5 252 4 651 17 308 16 471 17 118 Current liabilities Accounts payable and other 2 299 2 505 2 451 Borrowings 3 763 4 082 3 786 6 062 6 587 6 237 Non-current liabilities held for sale 46 48 46 Total liabilities 23 416 23 106 23 401 Total equity and liabilities 23 864 24 228 24 065 Group statement of changes in equity Ordinary share- holders' Share Treasury Foreign Share Reserve equity Ordinary capital shares and currency based Available- for non- Hedging before put Put share- and share translation payment for-sale controlling and other Retained option option holders' Minorities' Total R million premium options reserve reserve reserve interests reserve earnings reserve reserves equity interest equity Unaudited FOR THE SIX MONTHS ENDED 30 JUNE 2017 Balance at 31 December 2016 295 (604) 165 116 4 (2 411) (54) 4 502 2 013 (4 651) (2 638) 3 171 533 Correction of PPA misallocation - - - - - 235 - - 235 - 235 (235) - Dreams S.A. merger PPA finalisation adjustment - - - - - 131 - - 131 - 131 - 131 Restated balance as at 31 December 2016 295 (604) 165 116 4 (2 045) (54) 4 502 2 379 (4 651) (2 272) 2 936 664 Total comprehensive income for the period - - (71) - - - (19) (58) (148) - (148) 91 (57) Employee share schemes - - - (1) - - - 1 - - - - - Fair value of SunWest option - - - - - - - (55) (55) 55 - - - Fair value of Sun Dreams option - - - - - - - 217 217 (217) - - - Time Square option - - - - - - - - - (89) (89) - (89) Foreign exchange on put option - - (103) - - - - - (103) 103 - - - Realised hedge - - - - - - 50 - 50 - 50 16 66 Subsidiary share issue - - - - - - - - - - - - - Dividends paid - - - - - - - - - - - (136) (136) Balance at 30 June 2017 295 (604) (9) 115 4 (2 045) (23) 4 607 2 340 (4 799) (2 459) 2 907 448 Unaudited pro forma FOR THE SIX MONTHS ENDED 30 JUNE 2016 Balance at 31 December 2015 295 (590) 340 118 4 (3 136) 1 4 825 1 857 - 1 857 434 2 291 Total comprehensive income for the year - - (2) - - - (16) 45 27 - 27 (207) (180) Treasury share options purchased - 1 - - - - - - 1 - 1 - 1 Net deemed treasury shares sold - (18) - - - - - - (18) - (18) - (18) Employee share schemes - 9 - 11 - - - - 20 - 20 - 20 Delivery of share awards - - - - - - - - - - - - - Dreams S.A. merger transaction - - (1) - - 304 - - 303 - 303 3 451 3 754 Fair value of SunWest option - - - - - - - - - (1 272) (1 272) - (1 272) Fair value of Sun Dreams option - - - - - - - - - (3 980) (3 980) - (3 980) Acquisition of minorities' interest - - - - - 604 - - 604 - 604 106 710 Subsidiary share issue - - - - - - - - - - - - - Dividends paid - - - - - - - (91) (91) - (91) (113) (204) Balance at 30 June 2016 295 (598) 337 129 4 (2 228) (15) 4 779 2 703 (5 252) (2 549) 3 671 1 122 Group statement of changes in equity Ordinary share- holders' Share Treasury Foreign Share Reserve equity Ordinary capital shares and currency based Available- for non- Hedging before put Put share- and share translation payment for-sale controlling and other Retained option option holders' Minorities' Total R million premium options reserve reserve reserve interests reserve earnings reserve reserves equity interest equity Audited FOR THE YEAR ENDED 31 DECEMBER 2016 Balance at 30 June 2016 295 (598) 337 129 4 (2 228) (15) 4 779 2 703 (5 252) (2 549) 3 671 1 122 Total comprehensive income for the year - - 182 - - - (39) 105 248 - 248 (235) 13 Net deemed treasury shares sold - (36) - - - - - - (36) - (36) - (36) Employee share schemes - 30 - (13) - - - - 17 - 17 - 17 Increase in SunWest option - - - - - - - 14 14 (14) - - - Fair value of Dreams option - - - - - - - (261) (261) 261 - - - Currency translation differences - - (354) - - - - - (354) 354 - - - Acquisition of minorities' interest - - - - - (183) - - (183) - (183) (79) (262) Subsidiary share issue - - - - - - - - - - - - - Dividends paid - - - - - - - (135) (135) - (135) (186) (321) Balance at 31 December 2016 295 (604) 165 116 4 (2 411) (54) 4 502 2 013 (4 651) (2 638) 3 171 533 Supplementary information Period ended six months Unaudited Unaudited pro forma Audited 30 June 30 June 31 December R million 2017 2016 2016 EBITDA RECONCILIATION Operating profit 1 007 911 822 Depreciation and amortisation 822 600 788 Net loss/(profit) on disposal of property, plant and equipment* - 21 (9) Straightline adjustment for rentals* 9 11 10 Impairment of assets* 8 - 269 Pre-opening expenses* 40 15 4 Transaction costs* - 33 4 Profit on disposal of shares in associates (27) (18) - Share-based payments expense* 8 - - Monticello purchase price adjustment* - 48 - Other* 25 12 (4) Reversal of Sun International Employee Share Trusts' consolidation* 2 14 16 EBITDA 1 894 1 647 1 900 * Items identified above are included as headline and adjusted headline adjustments impacting operating profit in the segmental analysis. EBITDA margin (%) 25 26 25 Number of shares ('000) - in issue after excluding deemed treasury shares 97 856 97 977 97 903 - for EPS calculation 97 933 98 214 97 925 - for diluted EPS calculation 97 933 98 214 97 932 - for adjusted headline EPS calculation 104 132 104 140 104 140 - for diluted adjusted headline EPS calculation 104 132 104 140 104 147 Earnings/(loss) per share (cents) - basic (loss)/earnings per share (59) 32 107 - headline (loss)/earnings per share (78) 87 295 - adjusted headline earnings per share 198 280 223 - diluted (loss)/earnings per share (59) 32 107 - diluted headline (loss)/earnings per share (78) 87 295 - diluted adjusted headline earnings per share 198 280 223 Continued - earnings/(loss) per share (cents) - basic (loss)/earnings per share (60) (1) 103 - headline (loss)/earnings per share (79) 54 291 - adjusted headline earnings per share 197 250 219 - diluted basic (loss)/earnings per share (60) (1) 103 - diluted headline (loss)/earnings per share (79) 54 291 - diluted adjusted headline earnings per share 197 252 219 Period ended six months Unaudited Unaudited pro forma Audited 30 June 30 June 31 December R million 2017 2016 2016 Discontinued - Earnings per share (cents) - basic earnings per share 1 33 4 - headline earnings per share 1 33 4 - adjusted headline earnings per share 1 30 4 - diluted basic earnings per share 1 33 4 - diluted headline earnings per share 1 33 4 - diluted adjusted headline earnings per share 1 28 4 TAX RATE RECONCILIATION Profit/(loss) before tax 329 22 466 Share of associates' profits (1) 14 (1) Adjusted profit/(loss) before tax 328 36 465 % % % Effective tax rate (excluding Time Square settlements) 60 622 55 Preference share dividends (5) (44) (4) Prior year over/(under) provisions - (15) 1 Withholding taxes (1) 22 - Foreign tax rate variation 2 43 1 Exempt income 2 14 17 Exempt income - capital gains 1 178 - Foreign monetary adjustments and government incentives 9 41 1 Monticello purchase price adjustment - (53) - Reversal of deferred tax assets - - (20) Capital allowances and disallowed expenditure (40) (780) (23) South African corporate tax rate 28 28 28 KEY METRICS EBITDA to interest (times) 3.4 4.2 3.6 Borrowings to EBITDA (times) 3.9 4.3 3.8 Net asset value per share (Rand) 21.15 27.59 21.45 Capital expenditure 1 517 1 529 2 218 Capital commitments 871 4 404 3 385 Correction of Dreams S.A. PPA An amount of R235 million relating to the non-controlling reserve was in error allocated to minorities in the provisional PPA workings. This has been corrected by restating the opening balances of minorities' interest and the reserve for non-controlling interest. Condensed group statements of cash flow Period ended six months Unaudited Unaudited pro forma Audited 30 June 30 June 31 December R million 2017 2016 2016 Cash generated by operations before: 1 898 1 661 1 780 Time Square settlements - (715) - Vacation Club timeshare sales 78 58 83 Working capital changes (135) 659 509 Cash generated by operations 1 841 1 663 2 372 Tax paid (411) (395) (139) Cash generated by operating activities 1 430 1 268 2 233 Purchase of property, plant and equipment (1 485) (1 506) (2 185) Purchase of intangible assets (32) (38) (52) Payment of purchase differential - (345) - Proceeds on disposal of PPE and intangibles 4 7 33 Proceeds on disposal of investment 121 226 Loan and investment income 9 13 20 Cash flows from investing activities (1 383) (1 643) (2 184) Purchase of treasury shares (11) (18) (36) Dividends paid (136) (203) (321) Interest paid (592) (385) (508) Purchase of additional shares in subsidiaries - (272) (262) Disposal of shares in subsidiaries - 111 - Movement in borrowings 685 1 841 994 Net cash inflow from financing activities (54) 1 074 (133) Effect of exchange rates upon cash and cash equivalents (58) (58) (91) (Decrease)/increase in cash and cash equivalents (65) 641 (175) Cash and cash equivalents at beginning of the period 1 134 668 1 309 Cash and cash equivalents at end of the period 1 069 1 309 1 134 Assets held for sale (9) (8) (11) Cash and cash equivalents at end of the period excluding non-current assets held for sale 1 060 1 301 1 123 COMMENTARY Introduction Over the past few years, Sun International has made a number of significant investments including the: - development of Time Square in Menlyn, Pretoria; - acquisition of the minorities' interest in Monticello; - development of the Ocean Sun casino in Panama and the Sun Nao casino in Colombia; - merger with Dreams S.A. in Chile; - significant upgrades to Sun City; and - acquisition of a 70% equity interest in Sun Slots (formerly GPI Slots). All of the above investments and acquisitions were funded with debt resulting in a significant increase in the group's gearing levels. At the same time, the South African economy has deteriorated and business confidence has declined placing pressure on consumer disposable income. As a consequence, we have experienced disappointing revenue growth for a number of years. With the decline in commodity prices, the Chile economy has also come under pressure although the outlook has improved over the past few months. The Panama and Colombia investments are not meeting initial expectations and we are working towards either downscaling or exiting these businesses alternatively reducing the term of the Colombia property lease. For the period to 30 June 2017 our focus has shifted from a growth and investment phase to one of getting "back to basics". This has entailed critically reviewing several aspects of our business model, among others, increasing disciplines across the organisation, improving system utilisation and driving efficiencies. We are carefully analysing capital allocation and managing cash flow, which despite the disappointing performance, has enabled the group to grow free cash flow before expansion activities. A lot more still needs to be done but with the "back to basics" approach, we will not only improve operating performance but most importantly we will be able to improve our guest experience and ultimately grow revenue. Basis for accounting and disclosure Shareholders are reminded that in terms of announcements released by the Company on SENS on 22 August 2016 and 24 February 2017, Sun International has changed its financial year end from 30 June to 31 December, in order to align with its Chilean operations. Accordingly the earnings per share ranges for the six month period from 1 January 2017 to 30 June 2017 are compared against the pro forma results for the prior corresponding period from 1 January 2016 to 30 June 2016. The group pro forma income statement was derived by deducting the unaudited, published results for the six months ended December 2015 from the audited financial results for the year ended June 2016. The next full financial period will be for the 12 months ending 31 December 2017. In the tables throughout this report the columns headed 30 June 2016 (unaudited pro forma), 31 December 2016 (audited income statement and restated balance sheet) and 30 June 2017 (unaudited interim) are for the six month period then ended. Subsequent to the audited 31 December 2016 comparable balance sheet, new information was obtained during the current financial period that was in existence at the merger date of Dreams S.A. As per IFRS 3 (Business Combinations), "If the initial accounting for a business combination can be determined only provisionally by the end of the first reporting period, the business combination is accounted for by using provisional amounts. Adjustments to the provisional amounts, and the recognition of newly identified assets and liabilities, must be made within the measurement period where they reflect new information obtained about facts and circumstances that were in existence at the acquisition date (IFRS 3.45). The measurement period cannot exceed one year from the acquisition date and no adjustments are permitted after one year except to correct an error in accordance with IAS 8. (IFRS 3.50)" These amounts have been restated due to the finalisation of Dreams' IFRS 3 purchase price allocation (PPA). Property, plant and equipment (R42 million), deferred tax asset (R15 million), other non-current liabilities (R20 million) and other creditors (R140 million) were decreased whereas intangible assets (R28 million) and ordinary shareholders equity (R131 million) were increased. Financial overview The income statement below includes adjusted headline earnings adjustments. Six months ended Unaudited Unaudited pro forma Audited 30 June 30 June 31 December R million 2017 % 2016 2016 Revenue 7 560 19 6 349 7 670 EBITDA 1 894 15 1 647 1 900 Adjusted operating profit 1 147 8 1 064 1 216 Foreign exchange loss - 100 (17) (2) Net interest (483) (26) (382) (476) Profit before tax 664 (0) 665 738 Tax (232) (3) (225) (249) Profit after tax 432 (2) 440 489 Minorities (228) (40) (163) (260) Attributable profit 204 (26) 277 229 Discontinued operations and associates 2 (87) 15 3 Adjusted headline earnings 206 (29) 292 232 For the review period, total group revenue increased by 19% from R6.4 billion to R7.6 billion, with the growth attributable to the inclusion of Sun Dreams (from 1 June 2016), Sun Slots (from 1 April 2016) and Time Square (from 1 April 2017) results. Revenue generated by the South African operations (excluding alternative gaming, International Business, Time Square and Morula), declined by 1.9% on a comparable basis. Sibaya, Sun City, Sun Slots and Table Bay produced encouraging results with solid growth in revenue and EBITDA. In Chile, trading has improved at most of the properties other than Iquique and Monticello. Iquique has been affected by strike action in the mining industry, while Monticello continues to be impacted due to the relocation of the toll road. The Panama and Colombia operations continue to struggle and plans are in place to downscale these properties, dispose of certain assets and exit or reduce the term of the Colombia property lease. Group earnings before interest, tax, depreciation and amortisation (EBITDA) for the period under review increased by 15% from R1.6 billion to R1.9 billion. EBITDA generated by the South African operations declined by 9%, on a comparable basis. Interest charges are well up on the prior comparable period due to the inclusion of Sun Dreams for the full period and the opening of Time Square on 1 April 2017. Minorities' share of earnings has increased with the disposal of the 10% interest in SunWest and Worcester in April 2016 and the consolidation of Sun Slots and Sun Dreams for the full period. Adjusted headline earnings of R206 million are 29% below the comparable period with adjusted headline earnings per share down 29% to 198 cents. Headline and adjusted headline earnings adjustments include the following: - Profit on the disposal of R27 million of the group's assets in Botswana, Namibia and Lesotho to Minor International; - Share-based payments expense (in accordance with IFRS 2) of R8 million as a result of Sun International funding a Black Economic Empowerment special purpose vehicle which acquired equity interests in Time Square; - Time Square pre-opening expenses of R40 million (R22 million attributable to the group after tax); - Amortisation of R73 million of Dreams S.A intangibles (R30 million after tax attributable to the group). As indicated in the Profit and Dividend announcement for the financial year ended 30 June 2016, the intangibles recognised on the Dreams S.A. purchase allocation will be amortised with the charge being recognised as a headline earnings adjustment; - Interest charges of R22 million (R12 million attributable to the group after tax) on the debt raised for the Time Square settlements (with Peermont and Goldrush) which was adjusted for up to the opening of Time Square; and - A net reduction in the fair value of the put options of R162 million. Interim dividend Given the difficult trading conditions and the need to reduce the high debt levels, the board has decided not to declare an interim dividend for the six month period ended 30 June 2017. Revenue by nature and geographic segment South Africa Latam Nigeria Group 30 June 30 June 31 December 30 June 30 June 31 December 30 June 30 June 31 December 30 June 30 June 31 December R million 2017 2016 2016 2017 2016 2016 2017 2016 2016 2017 2016 2016 Casinos 3 489 3 430 3 489 1 976 1 216 2 062 31 49 30 5 496 4 695 5 581 International Business 9 165 (30) - - - - - - 9 165 (30) Sun Slots 504 237 516 - - - - - - 504 237 516 Sun Bet 25 15 24 - - - - - - 25 15 24 Rooms 480 439 482 113 20 110 19 22 19 612 481 611 Food and Beverage 424 385 444 241 124 280 18 21 18 683 530 742 Other 221 207 224 9 15 - 1 4 2 231 226 226 5 152 4 878 5 149 2 339 1 375 2 452 69 96 69 7 560 6 349 7 670 South Africa continues to contribute the majority of group revenue at 68% with Latam contributing 31% and Nigeria 1%. Gaming is the primary contributor to group revenue at 73%, alternate gaming contributes 7%, food and beverage 9%, rooms 8% and other revenues 3%. The table below sets out the consolidated revenue, EBITDA and operating profit by geographical region and the reconciliation between operating profit as reflected in the statement of comprehensive income and the income statement above which includes headline and adjusted headline earnings adjustments: Revenue EBITDA Depreciation and Amortisation Operating Profit 30 June 30 June 31 December 30 June 30 June 31 December 30 June 30 June 31 December 30 June 30 June 31 December R million 2017 2016 2016 2017 2016 2016 2017 2016 2016 2017 2016 2016 South African operations* 4 300 4 356 4 532 1 136 1 222 1 188 (409) (390) (391) 727 832 797 Time Square 276 - - 72 - - (45) - - 27 - - Morula 38 105 107 (4) 14 15 (1) 7 (2) (5) 21 13 International Business 9 165 (30) (15) 21 (55) - - - (15) 21 (55) Alternate Gaming Sunbet 25 15 24 1 (3) 3 (1) (1) (2) - (4) 1 Sun Slots 504 237 516 114 55 127 (44) (20) (39) 70 35 88 South Africa 5 152 4 878 5 149 1 304 1 309 1 278 (500) (404) (434) 804 905 844 Latam 2 339 1 375 2 452 591 341 623 (233) (154) (236) 358 187 387 Nigeria 69 96 69 (1) (3) (1) (14) (25) (14) (15) (28) (15) Total continued operations 7 560 6 349 7 670 1 894 1 647 1 900 (747) (583) (684) 1 147 1 064 1 216 Headline and adjusted headline adjustments to impact operating profit (75) (17) (104) (140) (153) (394) Unadjusted group operating profit 7 560 6 349 7 670 1 894 1 647 1 900 (822) (600) (788) 1 007 911 822 * South African operations excluding new and discontinued operations. Segmental review The implementation of strategic initiatives makes the current period difficult to analyse and therefore a segmental review with the full comparable trading of Dreams S.A. and Sun Slots is provided. The review is based on actual historic performance as if the acquisitions had been implemented with effect from 1 January 2016 (i.e. Dreams S.A and Sun Slots have been included for the June 2016 financial period). The segmental review throughout includes all headline and adjusted headline earnings adjustments. The table below sets out the operating performance of the group's geographic segments: South Africa Latam Nigeria Group 30 June 30 June 31 December 30 June 30 June 31 December 30 June 30 June 31 December 30 June 30 June 31 December R million 2017 2016 2016 2017 2016 2016 2017 2016 2016 2017 2016 2016 Revenue 5 152 5 108 5 149 2 339 2 620 2 452 69 99 69 7 560 7 827 7 670 EBITDA 1 304 1 360 1 278 591 701 623 (1) (3) (1) 1 894 2 058 1 900 Adjusted operating profit 804 905 844 358 442 390 (15) (25) (13) 1 147 1 355 1 221 PPA Adjustment - - - - (11) (3) - (3) (2) - (14) (5) Operating profit after PPA 804 905 844 358 431 387 (15) (28) (15) 1 147 1 341 1 216 South Africa The group's core casino operations continue to be impacted by the current economic climate in South Africa with comparable casino revenue down 4%. Hospitality operations performed well with 9% growth in rooms revenue, while food and beverage revenue grew by 10%. On a comparable basis revenue generated by the South African operations, declined by 1% while EBITDA declined by 9%. The International Business struggled to achieve the required volumes to mitigate against volatility and we continue to experience difficultly in collecting outstanding debts. Consequently, the board has taken the decision to suspend the International Business operations. Revenue EBITDA Operating profit 30 June 30 June 31 December 30 June 30 June 31 December 30 June 30 June 31 December R million 2017 2016 2016 2017 2016 2016 2017 2016 2016 GrandWest 1 031 1 049 1 105 391 426 440 316 363 369 Sun City 859 808 900 139 111 82 26 15 (17) Sun City - Vacation Club accounting adjustment (51) (72) (63) (44) (61) (44) (44) (61) (44) Sibaya 612 576 581 207 192 186 175 157 159 Carnival City 471 546 526 117 173 141 74 133 102 Boardwalk 276 296 289 34 61 49 (6) 18 8 Wild Coast Sun 231 229 244 38 46 43 13 18 18 Meropa 147 158 167 49 58 59 38 47 48 Windmill 123 141 138 36 48 47 25 38 37 Flamingo 84 88 91 22 27 25 15 21 17 Golden Valley 84 82 85 15 17 17 7 7 10 Carousal 130 157 158 19 29 31 5 14 17 Table Bay 175 167 167 45 38 37 37 30 29 The Maslow 71 69 78 (14) (11) (8) (23) (23) (20) Naledi 10 12 12 (4) (2) (1) (5) (2) (2) Fish River 12 11 17 (12) (11) (15) (13) (12) (12) South African operations* 4 265 4 317 4 495 1 038 1 141 1 089 640 763 719 International Business 9 165 (30) (15) 21 (55) (15) 21 (55) Sun Slots 504 237 516 114 55 127 70 35 88 Time Square 276 - - 72 - - 27 - - Morula 38 105 107 (4) 14 15 (5) 21 13 SunBet 25 15 24 1 (3) 3 - (4) 1 Management companies 293 298 293 98 81 99 87 69 78 Intercompany management fees (258) (259) (256) - - - - - - 5 152 4 878 5 149 1 304 1 309 1 278 804 905 844 * Comparable South African operations excluding management companies, new and discontinued operations. GrandWest (Western Cape) Revenue decreased by 2% to R1.03 billion while EBITDA decreased by 8%.