New Zealand’s SKYCITY Entertainment, which operates casinos in Adelaide and Darwin, has reported an 11.6 percent increase in profits during the six months to December 31.
Announcing the interim results on February 9, CEO Graeme Stephens was buoyant about the company’s position in both New Zealand and Australia.
“SKYCITY’s FY18 interim results deliver growth on the prior year and are largely in-line with our expectations and previous market guidance,” Stephens wrote in an official company notice.
Profits Improve Across the Board
Reviewing the figures, SKYCITY’s casinos generated $513 million in revenue during the second half of 2017, which resulted in normalised net profit after tax (NPAT) of $86.7 million. That figure takes into account a higher win rate against international high rollers and gives the company an 11.6 percent improvement on the corresponding period in 2016.
When the variation in theoretical win rate from international gamblers was excluded, SKYCITY’s final net profit was up by 7.9 percent to $83.7 million. The results are in line with the operator’s expectations, despite some testing times in New Zealand and Australia.
“Despite ongoing disruption from capital works in Auckland and Adelaide and a slightly less favourable New Zealand economic environment, we remain confident we can continue to deliver growth from our existing assets as well as the new projects in the pipeline,” Stephens continued.
Aussie Ventures Remain Buoyant
Focusing on SKYCITY’s Australian property in Adelaide, revenue was up despite an ongoing construction work. The $330 million development will see the current casino expanded and turned into a “world-class integrated entertainment destination.”
As well as improving the casino facilities, the company will add more hotel rooms and upgrade its entertainment and conference facilities. The aim is to not only generate more revenue from South Australians but attract corporations and international high rollers to use the facilities.
While SKYCITY is looking towards a 2020 completion date for its Adelaide property, it has reiterated that its Darwin casino is still up for sale. Although the venue achieved a “stable performance” towards the end of 2017, a full or partial sale remains a possibility at the right price.
For now, despite slower than expected economic conditions in New Zealand and a major expansion project, SKYCITY boss Stephens is happy with the “modest growth” shown. Moreover, he is positive that growth will accelerate in the future as mid-term plans start to blossom.