HOTELS&TOURISMOTHER BUSINESSESTOP STORY

South Africa hotel group, Sun International exits Nigeria

Hotel and gaming group Sun International becomes the latest South African company to pull out of Nigeria because of weak economic growth and clashes with regulators in the country.

In January, the Economic and Financial Crimes Commission (EFCC) launched a probe into Sun International’s initial investment in the Tourist Company of Nigeria, which owns and operates the 5-star Federal Palace Hotel in Lagos.

Sun International, which reported a 20 percent fall in diluted adjusted headline earnings per share (AHEPS) to 628 cents for the year to June, said in a statement today the Federal Palace Hotel had been hit by slow economic growth, the low oil price, the threat from Boko Haram and a weakening naira.

“The board has decided to exit Nigeria and steps will be taken to achieve this in a manner that does not erode further value,” the company said in a statement.

“Continued setbacks in Nigeria as well as the ongoing shareholder dispute have frustrated all attempts to develop and improve the property.”

Sun International is the latest South African company to clash with Nigerian authorities after telecoms group MTN was fined for failing to disconnect users with unregistered SIM cards.

Sun International’s decision to exit Nigeria follows food and clothing retailer Woolworths and Tiger Brands, which sold its Nigerian division to Dangote Industries.

According to other reports, the problem of the group is not restricted to what is happening to the Nigerian economy, the issues in the economy of its home base of South Africa is not helping the company.

Reporting its results, the company said poor economic conditions and general negative sentiment in its home market of South Africa resulted in revenue growth at casinos of only 0.8 percent at 7 billion rand ($514.78 million).

“In South Africa, the economic environment remains a serious concern. We do not anticipate any meaningful growth in gaming revenue until there is a recovery in the economy and renewed consumer confidence,” Chief Executive Graeme Stephens said.

The South African Reserve Bank expects economic growth at zero percent this year, due to a severe drought and falling commodity prices. News agency report said.

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  • Hey there, I think your website might be having browser compatibility issues. When I look at your blog site in Ie, it looks fine but when opening in Internet Explorer, it has some overlapping. I just wanted to give you a quick heads up! Other then that, excellent blog!

  • I love your blog.. very nice colors & theme. Did you create this website yourself or did you hire someone to do it for you? Plz respond as I’m looking to design my own blog and would like to find out where u got this from. thanks a lot

  • Hey there! I realize this is somewhat off-topic but I needed to ask. Does building a well-established blog such as yours require a large amount of work? I’m brand new to blogging but I do write in my diary every day. I’d like to start a blog so I can easily share my own experience and views online. Please let me know if you have any kind of suggestions or tips for brand new aspiring bloggers. Thankyou!