SkyCity raises FY20 earnings guidance

Thursday 20th of August 2020

SkyCity Entertainment has raised its guidance for earnings for the 2020 fiscal year due to higher estimates from insurance proceeds for fire damage at the New Zealand International Convention Centre last year.

The company said it now expects normalised profit after tax for the year ending June 30 to be between $65 million and $67 million, up from an estimate of $52 million to $67 million given in June.

Normalised EBITDA is seen at $199 million to $202 million, from $185 million to $205 million previously.

Report net profit is expected to be between $234 - $236 million, which includes an impairment charge on its Adelaide casino license of $150 million. Its prior forecast for reported net profit was $330 - $360 million, which didn’t include the charge.

“The proposed impairment has arisen due to revised expectations regarding the time frame for Adelaide Casino to achieve its long-term potential earnings following completion of the expansion project,” the company said.

The outlook for the casino has been clouded by the Covid-19 crisis and an expectation that international business will take years to recover.

SkyCity was the first operator in the Asia Pacific region to reopen, excluding Macau, and had reported better-than-expected demand. However, its flagship property closed on August 12 after the city discovered new infections after more than 100 days in the clear. That closure will remain until August 26 at least.