New Zealand and Australian gaming operator SkyCity Entertainment Group has reported a yearly drop in both revenue and net profit for the six-month period ended December 31st, 2023.
In results filed on Thursday morning, the operator indicated that it had seen an 8.5 percent drop in net profit after tax, totaling NZ$66.5 million. The operator notes that its earnings were ‘resilient […] despite the challenging economic environment’, indicating that it would be paying out an interim dividend.
Regarding revenue, the group saw a 3.7 percent yearly drop during the half-year, to NZ$445.2 million, as the group saw a recovery in table games in Auckland, ‘reflecting higher opening hours as labor constraints have eased’.
Table games opening hours increased by 17 percent compared to the prior period.
However, electronic gaming machine revenues were lower on an annual basis, ‘driven by lower customer spend levels’.
Gaming machine revenue amounted to NZ$228.9 million, down by 6.8 percent yearly.
Table games revenue was also down, by 1.8 percent yearly, do NZ$115.6 million.
The group’s premium tables revenue, however, saw a 35.6 percent increase, to NZ$22.1 million, benefitting from a favorable win-rate in Auckland.
Overall gaming revenue, including GST, totaled some NZ$372.2 million, down by 4 percent year-on-year.
The group’s overall EBITDA also fell, by 9.6 percent yearly, to NZ$146.3 million, despite an 18.4 percent increase in non-gaming revenue, to NZ$118 million.
The group notes that this ‘reflects increased visitation, particularly tourism in Auckland’.
During the period, the group recorded room occupancy rates of 87.5 percent, compared to 77 percent in 1H23.
Looking ahead the group notes that its major projects are ‘on track’, having repurchased its Auckland car park, and planning to open the Horizon Hotel in April of this year – expected to have a ‘small positive contribution for 2H24’. The group is also planning to open its New Zealand International Convention Center (NICC) in 2025.
SkyCity notes that it is also ‘preparing for New Zealand online gaming regulation’, noting that it has a ‘dedicated project team in place’. For 1H24, the group brought in NZ$5.6 million in online gaming revenue, down 29.2 percent yearly.
The group is planning for underlying group EBITDA for FY24 of between NZ$290 million and NZ$310 million, with net profit expected to be between NZ$125 million and NZ$135 million.
The group notes the results in the second half of the year ‘will reflect a continuation of the challenging economic environment’.
CEO transition
In an additional Thursday morning note, SkyCity indicated that its recruitment process for a new CEO is ‘relatively well advanced’.
SkyCity’s CEO Michael Ahearne, as announced in October of 2023, will be stepping down from the role on March 8th, with Calum Mallet (currently COO New Zealand) to commence as Interim CEO from March 9th.
Mallet will ‘remain in place whilst the SkyCity Board completes the recruitment process for a permanent Chief Executive Officer’.
The group’s Board Chairman, Julian Cook, will also provide ‘executive support on a part-time fixed basis’, starting February 26th.
Compliance
The group also indicates that it is working with authorities “with a view to resolving the current regulatory matters expeditiously’.
The group is facing a call by New Zealand authorities to suspend its casino operator’s license, as well as negotiating with Australian authorities over breaches at its SkyCity Adelaide property.
Regarding its negotiations with Australia’s financial watchdog AUSTRAC, it notes that ‘the parties have come to an agreement in relation to the contraventions that SkyCity Adelaide will admit in the AUSTRAC civil penalty proceedings and the amount of a civil penalty they will jointly propose’.
