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The Ken-and-Eddy show produces a damp ... |
Sun King Sol just gets hotter and stronger
RESORTS
EMBARRASSED at home over continuing allegations of bribery, Sol Kerzner is nevertheless underlining and strengthening his name as one of the world's top hotel and gambling entrepreneurs. A few months after its listing on the New York Stock Exchange, Kerzner's Sun International Hotels is one of the most highly rated entertainment stocks on Wall Street and analysts are singing his praises. SIH is run by Kerzner and his son Butch. Much of the current fanfare surrounds the recent opening of the $300-million (R1,4-billion) Mohegan Sun, a joint venture between SIH and the Mohegan tribe in the US state of Connecticut, just north of New York. In a report this month Wall Street bank Oppenheimer & Co says Mohegan Sun "sets a new benchmark for the future hotel-casino product". In the first 20 days of operation the casino generated $21,2-million of slot revenue. Per slot machine the winnings are $425, according to Kerzner "the highest average in the world" and compares to $115 per machine at Las Vegas. This week SIH also received initial approval for a casino license in Atlantic City, which will allow it to develop the 650 room hotel and casino recently bought from Griffin Gaming for $200-million. SIH's third resort in North America is Paradise Island in the Bahamas which is the major contributor to the group's earnings. Average occupancy at the resort now stands at 81%, a 25% improvement over last year. Kerzner says work has begun on a second expansion phase at Paradise Island, which will cost $375-million and boost the number of rooms to 3 000. It will also expand the marine complex to the largest open air fish habitat in the world, Kerzner says. SIH, in which JSE-listed Kersaf and the Kerzner family have an 18% share each, also runs Sun International's former offshore operations, comprising five resorts on Indian Ocean islands and four casinos in France. Its 1996 third-quarter results, published this week, show net income for the nine months 100% up at $31,2-million compared with $15,6-million in 1995. Earnings per share rose from 78c to $1,10 and analysts expect earnings for calendar 1996 of $1,60 a share from the 87c reported in 1995.
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