14 Aug 2013

Casino company profit down 8%

7:13 pm on 14 August 2013

Annual net profit for SkyCity Entertainment has fallen more than 8% due to a strong New Zealand dollar and weaker earnings.

The company's net profit fell to $127.3 million from $138.5 million last year. Analysts had expected full-year profit to be around $140 million.

SkyCity, which operates casinos in New Zealand and Australia, says several key factors impacted on its result, including the Rugby World Cup lifting profits in the previous year by $5 million.

The group also sold its half stake in Christchurch casino in December, which meant the second half results did not include the $3 million profit it received last year.

The surging New Zealand dollar against the Australian in the second half of the year wiped out most of the increasing earnings from its Darwin casino.

And the company provided for nearly $3 million in doubtful debts after a group visiting the Auckland casino earlier this year dishonoured its debts.

Chief executive Nigel Morrison said SkyCity hopes to recover some of the money and has stepped up surveillance since then.

The company declared a dividend of 10 cents per share, from 8 cents a year ago.

Shares in SkyCity fell 20 cents or nearly 5% to $3.90 after the announcement on Wednesday.