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SkyCity first-half profit falls 16 percent on lower IB win rate, year-earlier Rugby World Cup

Wednesday 13th February 2013

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SkyCity Entertainment Group, the casino and hotel company, said first-half profit fell 16 percent on a lower win rate for its international business and year-earlier Rugby World Cup benefits that weren't repeated.

Net profit fell to $66.3 million, or 11.5 cents a share, in the six months ended Dec. 31, from $78.8 million, or 13.7 cents a share, a year earlier, the Auckland-based company said in a statement. Revenue, including gaming GST, fell 1.4 percent to $487.3 million.

Profit missed the $75.9 million forecast by First NZ Capital and SkyCity today gave a mixed outlook statement, saying there are "indications of growth returning in New Zealand" while the performance of Adelaide would be "broadly flat" through the remainder of the year and Darwin should show growth as it benefits from investment.

The company said normalised full-year profit is expected to be about $140 million. In October it forecast profit on that basis "in the $140 millions" though it subsequently sold is stake in Christchurch Casino, which had generated $3.1 million in the second half of last year.

The company lifted its interim dividend to 10 cents a share from 9 cents a year earlier, saying it reflected its new dividend policy of making an annual payment of not less than 20 cents and not less than 80 percent of normalised profit.

The shares, which are rated 'outperform' based on the consensus of analysts polled by Reuters, last traded at $4 and have gained 6.4 percent this year.

SkyCity said the $12.5 million drop in first-half profit including $4.7 million negative impact from the Rugby World Cup and an $8.4 million impact from a softer international business win rate of 1.06 percent compared to 1.64 percent in the first half last year. The theoretical win rate is 1.35 percent.

Normalised profit , which includes the theoretical win rate and excludes certain one-time costs and gains, fell 3.4 percent to $74.4 million.

SkyCity Auckland, the company's flagship facilities, recorded a 1.9 percent decline in total revenue to $263.7 million. Of that, slot machine revenue fell 7.9 percent to $108.6 million, revenue from local tables gained to $61.8 million from $60.5 million and international tables, normalised, climbed to $28.8 million from 18.6 million.

Food and beverage sales rose to $24.1 million from $23.1 million, hotels and conventions fell to $30 million from $36.9 million while revenue from the Sky Tower and parking fell to $10.4 million from $11.9 million.

Gross gaming revenue at Adelaide edged up 0.4 percent to A$74 million, while food, beverage and other sales slipped 4.5 percent to $8.5 million.

SkyCity Darwin recorded a 12 percent gain in gross gaming revenue to A$54.9 million, while food, beverage and hotel sales jumped 18 percent to A$17.2 million.

SkyCity Hamilton's gross gaming revenue rose 5 percent to $23.2 million and food and beverage rose 2.3 percent to $4.5 million. SkyCity Queenstown gross gaming revenue fell 2.9 percent to $3.4 million while food and beverage sales rose to $600,000 from $500,000.

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