By Nqobile Dludla JOHANNESBURG (Reuters) - South Africa's casino and hotel operator Sun International scrapped its dividend, seeking to conserve capital to reduce debt and complete its 4.2 billion rand ($340 million) Time Square casino as the firm reported a profit loss on Monday. Sun International, one of two listed casino operators in Africa's most industrialised country, is scheduled to open its second-largest casino and entertainment complex in South Africa in April, which is expected to be key to the group's portfolio and growth at home. "The group's main focus in the immediate future will be to reduce debt and bed down the implementation and integration of recent acquisitions," the company said in a statement. "Taking account of the difficult trading conditions, the need to complete strategic group initiatives, particularly Time Square, and the need to reduce debt, the board decided not to declare a dividend for the period." Shares in Sun International, which have fallen more than 12 percent year-to-date, were down 1.23 percent at 76.05 rand by 0741 GMT. The owner of Sun City resort and Sibaya Casino, which has recently expanded further into Latin America, is grappling with slow economic growth, which has sapped sentiment. The slowing economy, foreign exchange losses and settlement charges resulted in a 35 percent drop in full-year profit, the company said. Sun International, which recently changed its financial year, said diluted adjusted headline earnings per share (HEPS) for July 1 to December 2016 fell to 223 cents per share from 344 cents in the comparable year. HEPS is the most widely watched profit gauge in South Africa and strips out certain one-off items. The reserve bank forecast the economy to grow 1.1 percent in 2017 compared with a projection of 1.2 percent in November. The group's core casino operations in South Africa were negatively affected by sagging demand from gamblers due to "difficult trading conditions and reduced consumer spend", with casino revenue down 2.7 percent. Group revenue grew 31 percent to 7.7 billion rand, with growth attributable to the inclusion of the Dreams S.A. merger and GPI Slots operations for the full period. "We expect gaming revenue in South Africa to remain under pressure given economic conditions. However, we do anticipate hotel occupancy to grow for the remainder of the year," group Chief Executive Anthony Leeming said. ($1 = 12.3275 rand) (Reporting by Nqobile Dludla; editing by Susan Thomas)