SkyCity posts lacklustre results in FY17

Casino operator SkyCity Ltd, which operates casinos and hotels in Australia and New Zealand reported a lacklustre results in the fiscal year 2017, marked by a 30 percent drop in turnover in its mainstay international business, and an even sharper drop of 42 percent in EBITDA.

The company’s full year results released on Wednesday refer to “modest growth’ in the New Zealand business, and lower net interest expense being offset by reduced turnover in international business and weak trading conditions in the company’s Australian properties.

The final dividend is steady at 10cps making 20cps for the full year, the same as in the previous year, with the company signalling the same dividend for the coming year.

Normalized revenue for the year ending June 30 2017 was $1.02 billion (US$750 million) – down 7.2 percent with NPAT down 1.3 percent to $154.6million (US$114 million)  and EBITDA down 2.6 percent to $321.5 million (US$238million)

The company wrote down goodwill on its Darwin business by $A95million (US$75million), which was a major factor in the sharply reduced earnings per share - down 72 percent to 6.8cps.

Chief executive Graeme Stephens said performance across the company had improved in the second half year with SKYCITY Auckland (which accounts for 80 percent of group turnover) showing “modest revenue and earnings growth” for the year despite the extensive building work on the International Convention Centre, and a new hotel in downtown Auckland. The company says these projects remain on budget with good progress made during the year.

He said the company’s international business in Auckland had been affected by “restrictions on funds transfers and a fall in visits by larger spending customers, particularly following the Crown arrests in 2017.”

The company is expecting “modest growth in FY 2018, with growth in the combined New Zealand businesses and a recovery in international business offset by further weakness in Darwin. Adelaide is expend to return to “most earnings growth in 2018.”

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