Casino and hospitality operator SkyCity Entertainment has recently posted its full-year results for the twelve months which ended on June 30th, 2019. The company reported a 14.7% decline in its annual net profit after tax from NZ169.5 million to NZ$144.6 million and came after the sale of the brand’s Darwin casino and a lower win rate registered in the company’s international business.
The group normalised profit after tax rose by 1.9% and its EBITDA (earnings before interest, tax, depreciation and amortisation) increased by 1.3%. Despite the challenges faced by the company in the operating environment, the operator described the results as solid, and the Chief Executive Officer Graeme Stephens explained that SkyCity’s operating results were slightly ahead of preliminary expectations.
Mr Stephens further revealed that the successful sale not only of the Darwin Casino but also of a long-term concession over the main site car parks in Auckland would provide approximately NZ$450 million, which would be used by the company to repay debt and return some capital to its investors via buybacks.
SkyCity Entertainment also shared that its major projects in Adelaide and Auckland are expected to be finalised by the end of 2020. It also confirmed the development of master plans for Auckland, Queenstown and Hamilton, including the acquisition of a piece of land in Queenstown, as well as the consolidation of properties in Auckland precinct.
NZICC and Horizon Hotel Project Become Subject to Considerable Delay
As explained by the company, despite facing a more challenging operating environment, the operator revealed that its SkyCity Auckland arm generated record EBITDA in the fiscal year which ended on June 30th, 2019. The earnings before interest, taxes, depreciation and amortisation of the SkyCity Auckland business rose by 2.8% in comparison to the previous financial year, reaching NZ$267.9 million.
Both the New Zealand International Convention Centre (NZICC) and Horizon Hotel project have been subject to significant delays from the completion dates which were originally agreed. In its latest press release, SkyCity revealed that both projects are proceeding, although the progress made with them was moving slower than desired. At this stage of the projects, the company shared it continues to expect completion towards the end of 2020. No material changes have been made to previous guidance on the overall investment for the project, as revealed by the company’s Chief Executive Officer.
SkyCity Entertainment provided a more cautious outlook for the ongoing fiscal year because of the current difficulties faced by the company in the local economic environment. Still, its year-to-date trading had been in line with preliminary expectations, with what they called “a positive start” registered in the international business of the company and its Auckland unit.
The gambling company recently launched its online gambling website which offers a web-based casino to help it offset the negative impact of the challenging gambling sector.