Sun International EBITDA for down 3%

This was notwithstanding a 6% growth in revenue from R2.152 billion to R2.287 billion.

Casino revenue for the quarter was 7% ahead of last year with Monticello revenue growth of 24%.

GrandWest, Carnival City and Sibaya achieved revenue growth of 5%, 4% and 8% respectively. The group's share of the Gauteng and Kwazulu-Natal markets remained relatively stable compared to last year.

Rooms revenue was in line with last year at R223 million. The group achieved occupancy of 62%, 3 percentage points lower than the same quarter last year at an average room rate of R946 (R889).

"Demand for rooms remains very soft, particularly in Cape Town, where The Table Bay occupancies declined from 40% last year to 30% in the same quarter this year. Last year was also assisted by the FIFA World Cup - excluding this business rooms revenues would have grown 7% in the quarter.

"Current forward bookings indicate a slightly better trend in the next quarter but rooms demand is expected to remain subdued for the rest of the financial year," the group said in a trading update.

The group achieved an EBITDA margin of 25.0% which was 2.4 percentage points lower than the comparative quarter last year.

Monticello EBITDA margin increased from 16% to 19% reflecting the improvement in revenues and operating efficiencies.

The EBITDA margin in the rest of the group was impacted by the slow revenue growth and all major cost categories growing at rates ahead of revenue.

Gaming and Hotels and Resorts operations both increased October revenues by 11% compared to last year.

Turning to developments, the group said that the upgrade and enhancement of the Wild Coast Sun is progressing well and is 75% complete.

The project is in its third phase and comprises the refurbishment of an additional 182 bedrooms, main kitchen and construction of a world class waterpark.

The total estimated capital expenditure remains at R400 million with final completion scheduled for mid-2012.

The expansion of Boardwalk continues and includes construction of the 870 bay parkade, new conference centre and 135 room five star hotel with an estimated completion date of December 2012.

The conversion of the existing conference centre into the new smoking casino is well underway with an anticipated opening in December 2011. The estimated cost of the project remains unchanged at R1 billion.

The group has entered into a long term lease for the Grayston hotel currently operated by Southern Sun.

The hotel which has 346 rooms and excellent conference facilities will close at the end of December 2011 and undergo a full refurbishment in 2012 at an estimated cost of R250 million, which will be financed 50% by the group and 50% by the landlord.

The hotel which is scheduled to reopen in early 2013 will be a significantly improved product which will be positioned as a four star plus.

Looking ahead, Sun International said better growth in revenues were expected in the second quarter with consequential improved EBITDA performance.