SkyCity first-half earnings beat expectations as high rollers, Auckland outperform

Tuesday 29th January 2019

SkyCity Entertainment Group says first-half profit beat guidance as high rollers and its flagship Auckland casino delivered strong performances.

Normalised earnings before interest, tax, depreciation and amortisation rose 10 percent to $189 million in the six months ended Dec. 31, which SkyCity said was due to strong growth from its international business and a good performance from its Auckland site.

The casino operator signalled both Auckland and the high rollers were clocking in good gains when it updated shareholders at its annual meeting in November.

SkyCity tracks the underlying performance by assuming a theoretical win rate among the high rollers of 1.35 percent. Subject to audit and board sign-off, reported net profit was $82 million, down from $93.5 million a year earlier. The international business win rate was 0.98 percent in the latest half, compared to 1.7 percent a year earlier.

The company now expects annual earnings will beat its previous guidance for a modest increase in normalised ebitda, it said in a statement.

"However, earnings growth in 2H19 will be harder to achieve given the improved performance achieved in 2H18," it said.

SkyCity has pared back its business to more profitable locations in Auckland and Adelaide, agreeing to sell its Darwin in November for A$188 million. The beleaguered international convention centre in Auckland was initially scheduled to open next month, but isn't likely to be completed this calendar year.

The shares last traded at $3.70 and have gained 4.2 percent so far this month.

(BusinessDesk)

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