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SkyCity says trading has returned to normal after Covid-19 disruption.
SkyCity Entertainment Group is “cautiously optimistic” about the coming year, as it weighs the positive impact of a rebounding tourism market with an uncertain domestic economy.
The casino company reported normalised earnings before interest, tax, depreciation and amortisation of $310.3 million in the year to the end of June, at the top end of its $300m to $310m guidance range and up from $137.9m the previous year. It expects a “modest” increase in earnings this year.
SkyCity’s business has rebounded from Covid-19 interruptions that have plagued recent years, noting trading last year returned to more normal pre-Covid levels with no disruptions.
Revenue rose 45% to $926.2m, which the company said was driven by its New Zealand operations performing very strongly, amid a high inflation environment with robust growth in electronic gaming machine revenue and a rebound in non-gaming revenue as people returned to its precincts.
“We are cautiously optimistic about the outlook for the coming year,” said chief executive Michael Ahearne.
“It reflects some uncertainty in the domestic economy. But I would say optimism from a tourism point of view.”
Ahearne said the company’s flagship Auckland complex, which includes the city’s only casino alongside bars, restaurants, hotels and Sky Tower, was benefiting from a rebound in tourism.
“We’ve seen the benefits of the tourism recovery – having the FIFA World Cup has been absolutely awesome,” he said. “We expect a pretty strong summer of tourism through the business.”
Still, he said the outlook was “a mixed bag” as the business faced significant cost inflation and consumers faced cost of living pressures.
He said a change to the group’s operating model gave it more flexibility to adapt to changing operating climates.
LAWRENCE SMITH/Stuff
Tourism Minister Peeni Henare addresses a tourism meeting at Air New Zealand’s HQ in Auckland.
The company expects to open its new Horizon Hotel early next year and its International Convention Centre in 2025.
He noted that would require some extra operational costs ahead of the opening, after which revenue would flow.
SkyCity reported net profit of $8m, a turnaround from a $33.6m loss the previous year. Profit was impacted by one-time charges, including about $100m related to its Adelaide casino in Australia.
The company resumed dividend payments, with a final dividend payment of 6 cents taking total dividends for the year to 12c. It paid no dividends last year.
SkyCity shares rose 2.7% to $2.30 in mid-morning trading on the NZX.
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