IT EMERGED at Johnnic Holdings' presentation of interim results yesterday that trading at the Suncoast Casino and Entertainment World complex near Durban has been well below original expectations.

This resulted in an overall operating loss at Suncoast in the six months to September. However, an upturn was observed at the complex after September, which the group is hoping will herald a change in fortunes.

Johnnic has a 70% stake in Durban Add-Ventures, which is a partner of Tsogo Sun in the Suncoast development. Suncoast is busy with its third phase, the building of a hotel.

Casinos in SA have not generally been profitable in their first couple of years because of substantial debt repayments. However, Johnnic's comments suggest Suncoast has not been doing well at an operating level.

In the same region, the Golden Horse casino at Pietermaritzburg, which is owned by Gold Reef Casinos, reported flat revenues in the six months to June and attributed this to the opening of Suncoast towards the end of last year.

It will probably take another December-January holiday season before it becomes clear whether the Durban-Pietermaritzburg corridor can maintain two profitable casinos.

Rain factor still vital

CHEMICALS group Omnia claims it employs the most agro- nomists in Africa, with a roll call of more than 80. But if anyone out there can perform a successful rain dance, Omnia would still be likely to study your CV with great interest.

The fact that the summer rains were six weeks later than usual has meant that Omnia's interim results to September were worse than expected. No rain means no planting, which means no need for fertiliser, sales of which account for almost half of Omnia's business.

While the interim figures were below par, the indications are that year-end results should show an improvement in the second half. Even so, Omnia CE Rod Humphris is keen to point out that 2002-03 was such an exceptional year, mainly because of the weak rand, that it will be impossible for such success to be repeated in the current financial year to February.

Omnia has been trying to reduce its dependence on the local weather, and has managed to bring the fertiliser component of its business down from around 70% to the current 45%.

This diversification strategy explains the recent acquisition of chemicals group Prochem, and the expansion of Omnia's explosives business through the acquisition and marketing of a new detonator technology.

It also explains Omnia's continuing expansion into Africa, Australia and New Zealand. However, as long as the company remains an important player in SA's fertiliser industry, the weather forecast will remain the TV programme of choice for Omnia executives.

US goes overboard

THE global trend towards more and more transparent corporate reporting is widely acknowledged to have been in the best interests of shareholders, but matters are starting to get out of hand in the US.

As dual-listed synthetic fuel and chemicals group Sasol will testify, there is already tremendous pressure on companies not only to reveal information and expose issues affecting performance, but also to predict the business risks to which they may be susceptible in future.

Now former vice-president Al Gore is leading a campaign designed to force companies to disclose the "risks of climate change" too, despite the fact the science behind such predictions is decidedly vague.

If it is possible for there to be too much of a good thing, such as transparency, this must be it.

Cape Editor Dave Marrs edits The Bottom Line. E-mail to This email address is being protected from spambots. You need JavaScript enabled to view it.

Dec 04 2003 07:20:21:000AM  Business Day 1st Edition