Sun International Announces 2002 First Quarter Results

PARADISE ISLAND, The Bahamas å- Sun International Hotels
Limited (NYSE: SIH) reported net income for the quarter, before losses attributed to its
recently launched SunOnline internet gaming operations, of $31.8 million compared to
recurring earnings of $32.9 million in the same period last year. On this basis, earnings
per share for the period were $1.12 compared to recurring earnings per share of $1.20 for
the same period last year. Non-recurring items in 2001 included pre-opening expenses
and sale of real estate at the Companyå‘s Paradise Island operations.
The Company reported EBITDA for the quarter, excluding SunOnline, of $54.2 million
as compared to $55.5 million in the same period last year. Butch Kerzner, President of
the Company commented, “we are very pleased with the quarter’s results. The return of
business at Atlantis so soon after September 11 has been excellent. After a somewhat
slower January, the property returned to 2001 levels for February and March. Consistent
with our strategy not to engage in price discounting, but rather to focus on maintaining
rate integrity supported by stronger marketing efforts, we were able to maintain Atlantis’
room rate for the quarter. In March, Atlantis recorded the highest monthly revenues in its
history.”
Including the net loss from SunOnline, the Company recorded net income in the quarter
of $29.6 million, compared to net income of $33.2 million for the same period last year.
On this basis, fully diluted earnings per share for the quarter were $1.04 compared to
$1.21 for the same period last year. As previously announced, on February 15, 2002, the
Company agreed to sell 50% of SunOnline, the Company’s online gaming subsidiary, to Station Casinos, Inc. in a transaction that is expected to close in the second quarter of
2002.
During the quarter, the Company’s Paradise Island operations achieved a record EBITDA
of $51.2 million compared to $50.8 million achieved during the same period last year.
The growth in EBITDA was achieved despite a decline in net revenues of $6.2 million.
The Paradise Island operations benefited from the cost controls that were instituted
during the last quarter of last year resulting in EBITDA margins increasing from 35.5%
last year to 37.5%.
Atlantis’ revenue per available room (“RevPar”) for the quarter was $240, a 6% decline
from the same period last year. RevPar trends experienced sequential improvement by
month, as comparative RevPar declined by 17% and 8% in January and February,
respectively, but increased in March by 2%. For the quarter, Atlantis achieved 85%
occupancy at a $284 average daily room rate (“ADR”), the same rate as last year.
Call levels for the quarter into the Company’s wholly owned tour operator increased by
11% as compared to the same period last year. Call levels for April are on a pace to
increase by 16%. Casino volumes have also been strong. Table drop declined by 17% in
the quarter, which was almost entirely attributable to the timing of the Michael Jordan
Celebrity Invitational that occurred in January of last year. The tournament has been
rescheduled for September. Slot volumes were the same as last year’s strong first
quarter.
The Company’s luxury resort hotel on Paradise Island, the Ocean Club, also performed
well and has established itself as one of the premier hotels in the Caribbean. RevPar in
the quarter increased by 13% to $612 in the current year from $542 in the same period
last year. The ADR was $865 compared to $739 for the same period last year, which
management believes is one of the highest ADRs for any resort property in the
Caribbean. The resort has recently enhanced its amenities through the opening of the
Ocean Club Spa, which is a new concept in spa design that is designed to provide a
uniquely private and exclusive spa experience.
The Company manages seven luxury resort hotels in Mauritius, Dubai and the Maldives.
During the quarter, the Company earned management fees of $2.2 million from these
operations, compared to $2.6 million in the comparable quarter last year. The decrease in
management fees was due primarily to the temporary closure of Le Touessrok in
Mauritius, which is currently undergoing a significant refurbishment and is expected to
re-open at the end of 2002.
The Company’s managed resorts in Mauritius continued to perform well and received
international accolades, with the five-star deluxe, Le Saint Geran leading the way by
achieving a 15% increase in RevPar. Le Saint Geran was also voted “Best Hotel of the
Year 2002” by Tatler magazine in the United Kingdom. In Dubai, the Royal Mirage, is
quickly building to its pre-September 11 business levels with March RevPar down only
11% as compared to year ago levels.
The Company closed the quarter with strong liquidity. At the end of the quarter, the
Company held $76.0 million in cash and cash equivalents, including $4.5 million in
restricted cash. The balance outstanding on the Company’s Revolving Credit Facility,
which was $15.0 million at the end of the quarter, has since been paid down in full.
At the end of the quarter, the Company received $19.0 million in connection with the
repayment of principal and accrued interest related to Subordinated Notes due from
Colony Capital. The Notes arose in connection with the Company’s sale of Resorts
Atlantic City, in a transaction that was completed in April 2001.
Sun International Hotels Limited is a leading developer and operator of premier casinos,
resorts and luxury hotels. Our flagship destination is Atlantis, a 2,317-room, ocean-themed
resort located on Paradise Island, The Bahamas. Atlantis is a unique destination
casino resort featuring three interconnected hotel towers built around a 7-acre lagoon and
a 34-acre marine environment that includes the world`s largest open-air marine habitat.
We also developed and receive certain revenue from the Mohegan Sun casino in Uncasville, Connecticut. The Native American-themed Mohegan Sun is one of the
premier casino gaming properties in the Northeast. In our luxury resort hotel business,
we operate eight beach resorts in Mauritius, Dubai, the Maldives and The Bahamas. For
more information concerning Sun International Hotels Limited and its operating
subsidiaries, visit our website at www.sunint.com.
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