9 Aug 2017

SkyCity profit falls 69 percent

11:01 am on 9 August 2017

A big write-down in its Australian business has knocked the profit of casino operator SkyCity Entertainment by more than two thirds.

SkyCity signage

Photo: RNZ / Cole Eastham-Farrelly

The company's net profit for the year ended June was $NZ44.9 million compared with $NZ145.7m last year.

The result was hit by an $AU95m write-down in the value of the Darwin casino, which was signalled two weeks ago.

Leaving aside the Darwin write-down and other smaller adjustments, the normalised profit was $NZ154.6m, at the lower end of market expectations.

"A number of factors contributed to our financial performance for the year including the modest growth at our New Zealand properties and lower net interest expense," chief executive Graeme Stephens said.

The company's flagship Auckland casino remained the backbone of earnings with revenue rising 3.5 percent, while its Hamilton business was stronger than last year, and the small Queenstown operation was steady.

Mr Stephens said the company was working to limit the disruption to Auckland's business from big construction projects around it including the international convention centre and hotel, and works associated with the city rail loop.

However, turnover in business from international gamblers had fallen 30 percent, and more than 40 percent drop in earnings, because of a crackdown by China on its citizens gambling overseas and restrictions on transferring money out of that country.

The Adelaide Casino's performance was also softer because of the start of an $AU330m redevelopment.

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