New Zealand and Australia gaming operator SkyCity Entertainment Group has announced that it will suspend its dividends for the second half of 2024 and for all of 2025, as it aims to ‘hold prudent levels of committed liquidity headroom’.
In an update on Thursday, the group pre-empted its need to maintain its net debt and EBITDA levels ‘within its financing agreements’, noting the AU$67 million ($44. Million) civil penalty it has to pay to Australia’s financial crimes watchdog AUSTRAC.
It also noted a commitment of ‘approximately NZ$76 million ($47.1 million) capex’ in order to complete the New Zealand International Convention Center (NICC),
The group also updated its earnings guidance, noting that group EBITDA for FY24 is expected to be between NZ$280 million ($173.5 million) and NZ$285 million ($176.6 million).
Net profit after tax (NPAT) for the year is expected to be between NZ$120 million ($74.3 million) and NZ$125 million ($78.1 million).
The group attributes the updated figures (a decrease from previous guidance) to ‘the ongoing challenging economic environment impacting customer spend’.
It also highlights construction delays by the contractor of its Horizon Hotel – whose opening is now pushed back to August of 2024.
In addition, the group is hedging against a possible increase in its Adelaide casino duty expense this year – linked to a court ruling on the ‘treatment of loyalty points’. The group’s guidance for FY25 does not include a possible impact of a potential temporary suspension of its casino operator’s license in New Zealand – with the hearing on the matter having been delayed from April 15th to August.
