13 Feb 2013

Profits fall at SkyCity Entertainment Group

7:25 pm on 13 February 2013

SkyCity Entertainment's profits for the six months to December fell nearly 16% on flat earnings but the company remains confident of a full year result to match last year.

SkyCity Entertainment's profit was $66.3 million compared with $78.8 million in the same period last year.

SkyCity stresses the impact of the Rugby World Cup on its first half year result last year, and says when that's stripped out, growth continued across its main casino businesses.

Smoothing out tax payments and other costs, normalised profit fell 3.5% to $74.4 million.

International business turnover surged by three-quarters, which the company says demonstrates the success of its Horizon brand catering for Asian gamblers, though its percentage of wins fell more than 0.5%.

In New Zealand, revenue at its flagship Auckland casino fell slightly, Hamilton's earnings grew slightly while Queenstown remained flat.

In Australia, the upgraded Darwin casino grew nearly 6% while Adelaide flatlined.

In December, SkyCity announced a $370 million upgrade of its Adelaide Casino after striking a deal with the South Australian state government on rules for the gaming sector.

It also sold its stake in Christchurch Casino in exchange for taking full ownership of its Queenstown establishment.

The firm says it hopes to revive long-delayed talks with the Government over the proposed $350 million convention centre in Auckland, while Queenstown has significant potential for growth and it's eyeing up opportunities in the Philippines.

SkyCity is expecting a full year profit in the $140 millions - in line with last year's result.

The company will pay an interim dividend of 10 cents a share, up from 9 cents last year.

Shares in the casino operator rose a cent to $4.01 each, after an initial fall on the announcement.

Chief executive Nigel Morrison says last year's profit was boosted by the Rugby World Cup, which it can't repeat this year and the firm's had a lower win rate from its international business.

But he says the result is satisfactory and there was good growth in Adelaide and Darwin on an earnings level and while it was relatively flat in New Zealand there's been some good cost management at the corporate level.