SkyCity Casino reports improved full-year profit
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Casino operator SkyCity has reported an improved full year profit, but revenue was knocked by intermittent Covid closures and it's already counting the cost of the current lockdown.
Key numbers for the year ended June (millions of $) vs year ago
- Net profit after tax $156.1m vs $235.4m
- Normalised profit $90.3m vs $66.3m (excludes one off items)
- Revenue $952m vs $1.21bn
- Dividend 7 cps
SkyCity said lockdowns had knocked the earnings of the flagship Auckland casino several times during the year, but when it was fully open strong domestic tourism numbers had back towards pre-Covid levels.
The normalised net profit, which stripped out one off items, beat its recent guidance, but overall profit was still lagging 2019.
Chief executive Michael Ahearne said it was a solid result in a challenging environment.
"Local gaming has performed well when open and operating without restrictions, while our tourism-related businesses including hotels, food and beverage, attractions and International Business had weaker results primarily due to ongoing international and domestic border closures."
Its New Zealand businesses generally performed well, especially gaming machines, while trading was improving at the reopened and upgraded Adelaide casino.
The online casino, launched in 2019 and based in Malta for legal reasons, grew the number of active users to more than 45,000.
Ahearne said the company was prepared and waiting for online gambling to be allowed in New Zealand.
"Without proper regulation and with the growth of online gaming market, there is a risk harm minimisation is not prioritised by all providers in the market. There has been a move by many jurisdictions to regulate for this reason."
The latest result was lifted by a further payout for the International Convention Centre (ICC) fire, and damages recovered for ICC contract delays by Fletcher Building.
Ahearne said the current environment was too unpredictable and uncertain to give detailed earnings guidance, although the lockdowns were costing the company about $1m a day in lost operating earnings.
He said no decision has been made about whether SkyCity would apply for the wage subsidy in the current lockdown. It did did last year but repaid part of it after it returned to profit. At this stage it intended to retain all staff.
The Auckland casino has been named as a place of interest in the latest Covid-19 outbreak, which Ahearne said had added to its costs.
It has also set aside money to cover any costs arising from the investigation by Australian financial regulator Austrac for alleged breaches of anti-money laundering rules.
The clean up of the ICC is almost complete and rebuilding due to begin. It now expected the Horizon hotel to be finished in 2024 and the ICC late that year.
Ahearne said the company's finances were in good shape after it restructured its debt and raised finance through a share issue last year, but it was too early to say if the current lockdown would affect its ability to pay an interim dividend next year.
