8 Aug 2018

SkyCity hits record $169.5 million full year profit

9:54 am on 8 August 2018

The casino operator, SkyCity Entertainment, has reported a record full year profit as its New Zealand business improved, and its high rollers business recovered.

SkyCity signage

SkyCity Entertainment's net profit for the year ended June was $169.5 million Photo: RNZ / Claire Eastham-Farrelly

The net profit for the year ended June was $169.5 million compared with last year's $44.9m, which included a large writedown in the value of its Darwin casino.

SkyCity's chief executive Graeme Stephens said the recovery in the international business and a return to earnings growth in Australia were particularly encouraging.

"Set alongside the continued growth of our flagship Auckland property on a record previous corresponding period and a solid result from our Hamilton site, the group's performance provides us with confidence that we can continue to deliver on our key strategic initiatives and major projects over the coming year," he said.

SkyCity's normalised net profit, which takes out one-off items and better reflects the underlying business, was up 10 percent to $169.95m.

Group revenue was dominated by the flagship Auckland casino, where revenue rose 3 percent, while earnings in the international high rollers business rose 39 percent.

The company's Australian casinos in Adelaide and Darwin were mixed, with the former's earnings fractionally higher, while the latter fell by 1 percent.

SkyCity has had the Darwin establishment up for sale and said it had received indicative bids that were above book value.

The smaller New Zealand casinos in Hamilton and Queenstown had improved returns.

Mr Stephens said the $700m international convention centre and hotel complex being built by Fletcher Construction remained about six months behind schedule but should be completed by the middle of next year.

It has a number of major conventions already booked for 2020.

He said the extra costs by the delays to the project should be covered by liquidated damages provisions but the legal situation would be reviewed later in the year.

Mr Stephens said trading at the start of the year has continued on from the strong end of the past year and the outlook for the full year is one of modest growth.

He said longer term SkyCity would be looking at hotel projects here and in Australia and also explore developing an online casino operation to counter growing competition from that area.

The company's full-year dividend was maintained at 20 cents a share.