SkyCity seen posting H1 2021 loss

Skycity

SkyCity Entertainment, New Zealand’s only listed casino operator, is likely to post a loss in the first half of fiscal 2021 as the Covid-19 pandemic hits, the country’s largest brokerage firm said.

Craigs Investment Partners said in a note that its revised forecasts take into account the closure of all SkyCity properties for eight weeks and that it will take two years for tourist numbers to recover.

Craigs has lowered its estimate for normalised EBITDA for FY20, which ends on June 30th, from $224 million to $166 million and normalised NPAT from $80 million to $37 million. A loss in the H1 2021 is forecast.

“We estimate SKC’s monthly cash burn rate at around $35 million while the properties are closed, meaning its $425 million of available funds is sufficient for almost 12 months of closure,” Craigs said.

It adds that there is a risk of the company breaching banking covenants, but expects “debt holders could be flexible if trading restrictions have been lifted and there is a path to recovery of earnings, but we also now expect SKC to raise new equity,” and suggests that $300 million would give the company greater headroom.

The company announced on Friday that it would lay off 200 staff and that another 900 would be affected in future. Capex has been slashed and no new projects will be undertaken although the building of the International Convention Centre and the Horizon Hotel in Auckland and completing the revamp of the Adelaide hotel and casino will continue. Executive pay has been slashed and other staff will be asked to take pay cuts to retain jobs and cut costs.

 

Related Articles

SkyCity cuts forecasts as fire, Coronavirus hit

SkyCity Entertainment, New Zealand’s only listed gaming company, has cut forecasts for the year and says the near-term outlook is gloomy, as it grapples with the aftermath of a fire in a key project and now the impact of the Coronavirus. The operator, which has properties in both New Zealand and Australia, hit the headlines […]

SkyCity Entertainment fills out its new leadership team

SkyCity Entertainment has announced three top executives to fill out its new leadership team.

SkyCity Adelaide to reopen on Sunday

SkyCity Entertainment said its Adelaide casino will open on Sunday to certain Premier membership tiers, with a maximum capacity of 100 people

SkyCity mum on reasons for executive shakeup

There must have been a reason why SkyCity Entertainment showed the door to three of its top executives on Monday, but so far the firm is giving no credible answers to that question.
Unexpected shakeup at SkyCity

Unexpected shakeup at SkyCity

If we had known that the week would begin with an operator in Australasia replacing its management, we would have expected it to be news of Crown Resorts, not SkyCity.

SkyCity outlines Auckland enhancement projects

SkyCity Entertainment has outlined upgrades to its Auckland entertainment complex to draw in domestic visitors in the absence of international tourists.

SkyCity doesn’t expect normality until 2022

SkyCity Entertainment Group says it doesn't expect to be back to full strength until 2022 and has prepared the business for the eventuality of further Covid-19 lockdowns.
Jacinda Ardern

Greens seen as gambling wild card in NZ elections

New Zealand’s main political parties are unlikely to change the gambling landscape post general elections that end on Saturday, although the picture may be different if the hard left Green Party becomes part of the government.
SkyCity Hamilton

Covid-19 restrictions dropped for SkyCity properties outside Auckland

SkyCity Entertainment has announced that, except for Auckland, Covid-19 restrictions will no longer be necessary at its New Zealand properties. This means that the firm’s Hamilton and Queenstown facilities can now operate once again without physical distancing measures and that the general public can return to the casinos. SkyCity Auckland, however, will continue to operate […]

SkyCity revenues rise and profits fall in FY2020

The SkyCity Entertainment Group announced its full year results on Thursday morning for the July 2019 to June 2020 period, showing revenues rising but profits falling in relation to the previous year. As for the revenues, they were up about 37 percent to over NZ$1.1 billion (US$765 million). More than 44 percent of these revenues […]