SkyCity Entertainment Group has announced that its reported loss for its financial year, ended June 30th, rose to some NZ$143.2 million ($88.23 million), amongst compressed revenue due to ‘a challenging operating environment’.
While overall group revenue was up by 0.3 percent, to NZ$928.5 million ($572 million), EBITDA fell by 16.7 percent yearly, to NZ$138.2 million ($85.15 million), also due to the ‘impact of the significant accounting adjustments’.
Speaking of the results, the group’s CEO Jason Walbridge noted that “SkyCity is coming off a very challenging financial year, with the combination of the soft economy, cost-of-living pressures in both New Zealand and Adelaide, and responding to various regulatory matters”.
Gaming revenue for the group fell by 2.9 percent yearly, reaching NZ$727.7 million ($448.34 million), partially lifted by strong Premium Table Games performance – which rose 53.6 percent yearly, to NZ$39.5 million ($24.34 million).
Gaming machine revenue continued to be the strongest contributor, at NZ$453.2 million ($279.2 million) – a 5.1 percent drop. The group notes the segment was ‘impacted by economic uncertainty in New Zealand partially offset by a second half recovery in Adelaide’.
Table Games revenue also fell, by 2.4 percent, to NZ$225.6 million ($139 million), ‘rebased to a new level following an improvement in labor availability in New Zealand and changes to cash limits in Adelaide’.
Online Gaming revenue fell by 39.2 percent to just NZ$9.3 million ($5.73 million).
SkyCity Auckland continued to be the main gaming revenue driver – bringing in some NZ$456.5 million ($281.25 million), a slight fall of 0.8 percent.
Premium Table revenue was up 64 percent, to NZ$25 million ($15.4 million), due to a ‘higher than theoretical win rate’.
Gaming Machine revenue was down by 6.6 percent – to NZ$285 million ($175.6 million), due to the economic environment and ‘increased host responsibility initiatives’.
Local Table revenue was up by 4.9 percent, to NZ$146.5 million ($90.26 million).
The group’s Australian operation, SkyCity Adelaide also saw strong Premium Table revenue increases, up 39 percent yearly to NZ$12.3 million ($7.58 million).
Overall, gaming revenue at the property fell by 4.9 percent, to NZ$170.9 million ($105.3 million)
Gaming Machine revenue fell by 0.8 percent, to NZ$99.7 million ($61.43 million), helped by an improvement in the second half of the fiscal year. Local Table revenue was down 16.3 percent, to NZ$58.8 million ($36.23 million) influenced by ‘operational changes, including reduced opening hours and the introduced cash limits’.
Regarding the property, the group notes that ‘declaratory proceedings are pending in the casino duty dispute with Revenue South Australia’. It’s also expecting to receive the report of an independent review into SkyCity Adelaide’s operations, after it settled with AUSTRAC, by December 31st of this year.
Online expectations
The group notes that the results from its online sector reflect ‘the operating disadvantage SkyCity is currently facing due to the lack of regulation and the limited enforcement of current restrictions against overseas operations’.
But it highlights its preparations for New Zealand to regulate online gaming, ‘expected to be in place from early 2026’, noting that it is ‘increasing the project team and actively working to progress New Zealand online gaming opportunity’.
In June the group announced that it was divesting its entire shareholding in Gaming Innovation Group (GiG), which it acquired in April of 2022. The sale was completed in July of this year.
Outlook
Looking ahead, the group expects its fiscal 2025 to yield underlying group EBITDA of between NZ$245 million ($150.94 million) and NZ$265 million ($163.27 million), and doesn’t expect to pay a dividend.
It’s also expecting costs of some NZ$20 million ($12.23 million) to NZ$30 million ($18.48 million), linked to regulatory and project related costs at SkyCity Adelaide, costs associated with Horizon by SkyCity opening in August 2024, pre-opening operational investment for the New Zealand International Convention Center (scheduled to open in 2025) and investment in its online gaming capability ahead of potential regulations in New Zealand.
“A key milestone in customer care and experience will begin next year with the introduction of 100 percent carded play across our New Zealand casinos by July 2025, and at the SkyCity Adelaide casino by early 2026. Once implemented, carded play will be the only way to game at SkyCity,” noted the group CEO.
The group is estimating that initial impact of Mandatory Carded Play (MCP) will be ’15 percent to 20 percent of annual uncarded gaming revenue,’ noting that there is a ‘high degree of uncertainty associated with this assumption’.
