2016 Integrated Annual Report

Operating environment

Sun International has grown, not only in the number of its properties but also geographically as it expanded outside of the African continent into Latin America – firstly with Chile in 2008, then Panama in 2014, Colombia in 2015 and the Dreams merger in 2016.

Regulatory environment

South Africa has a complex regulatory environment and each industry has various oversight bodies to ensure compliance with regulation. Gaming legislation – namely the National Gambling Act No. 7 of 2004 is Sun International’s primary compliance focus.

The South African economy has experienced lacklustre growth over the past few years. According to economists, the GDP growth rate in South Africa is expected to be under 1% by the end of 2016 and looking forward, economists estimate a GDP growth rate in South Africa to be just over 1% in 2017. In the long term, the GDP growth rate is projected to trend around 2% in 2018.
Chile has been one of Latam’s fastest growing economies over the past decade. In recent years it has reduced poverty rates but the country still faces challenges. With a significant reliance on copper and the recent weakening in demand and the price of copper, the currency has weakened and growth rates have slowed however growth is expected to increase to over 2% in 2017 and 2018.
Peru has been one of the region’s fastest growing economies, with an average growth rate of 5.9% in a context of low inflation, averaging 2.9%. A favourable external environment, prudent macroeconomic policies and structural reforms in different areas combined to create a scenario of high growth and low inflation. Over the next two to three years, large-scale mining projects are expected to begin production and increased private and public investment in infrastructure projects will support growth.
Colombia remained among the fastest growing economies in the region in 2015, largely due to effective macroeconomic and fiscal management. However, the country was significantly affected by the global economic slowdown and lower oil prices – economic growth slowed from 4.6% in 2014 to 3.1% in 2015. Growth is expected to moderate further to 2.7%, before beginning to recover in 2017.
Panama has been one of the fastest growing economies worldwide, with an average annual growth of 7.2% between 2001 and 2013. Economic growth was 6.2% and 5.8% in 2014 and 2015 respectively, with a forecasted growth of 5.9% in 2016. In the medium term growth is likely to remain between 6% and 6.5%. Public and private investments should remain high, with the recently opened Canal.