SkyCity Casino Issues Revised Improved H1 Results

Elouise Spencer - 24 August 2020

New Zealand’s SkyCity Entertainment has amended its existing forecast for the period ending June 30. The casino operator cited a revision necessitated by better-than-expected results as the reason for the amendment.

Those factors contributing to the improved financial outcome include an insurance payout higher than that initially anticipated, and a significant impairment to the value of the group’s Adelaide casino (Australia). The group has amended the value derived the impairment of its Adelaide casino to now total NZ$161 million (US$104.7 million).

Changes To EBITDA, Profits

The abovementioned changes have obviously caused certain changes to other areas of reported performances also, including that of an improved EBITDA projection for the first half of the current year, as well as an upward curve in profit gained.

The mentioned insurance payout was according to SkyCity received as a result of a fire at its New Zealand International Convention Centre and Horizon Hotel late last year in October. At the time still under construction, the venue is an expanding extension of its SkyCity casino complex.

Now that the increased insurance payout has been factored into the overall financial report pertaining to the first half of the year, EBITDA is expected to normalise at between $185 million and $205 million. This being a great deal more positive than SkyCity’s previous $199 million normalised EBITDA projection.

Net profit after tax has obviously been bumped to a more favourable rung on the performance ladder also. Net profit is now expected to come in at between $65 million and $67 million, as opposed to SkyCity’s former projection along the lines of anywhere between $52 million and $67 million.

About Adelaide Casino

The reported increased earnings will however be negatively mitigated by SkyCity’s revised Adelaide casino value. The impairment will be offset against the actual value of those assets noted in the Adelaide casino’s registry.

The venue’s long-term forced closure, which lasted up to and including June 30, has according to SkyCity played a leading role in the now-impaired value of the mentioned Australian-based casino. The group also stressed that the eventual outcome in terms of the actual value of the impairment will only be published once said impairment has been reviewed and signed-off on by the group’s auditor as well as its board of directors.

SkyCity has in the meantime had to once again close the doors to its Adelaide venue – this following the re-implementation of commercial restrictions by the Australian government, and as announced on August 12.