Sky City profit up around 13 per cent

Sky City Entertainment Group has announced a full year profit up 12.9 per cent to $120.1 million.

The casino operator today reported the result for the year to June was achieved on operating revenue up 11.8 per cent to $757.9 million.

New Zealand operations had shown a recovery from smoking bans implemented in December 2004, the company said.

Australian operations had performed strongly as a result of new facilities and economic momentum.

Group net profit was enhanced by a reduced tax rate, one-off funding, exchange gains and long-term debt restructuring.

A final dividend of 14c per share would be paid, bring the total distribution for the year to 26cps.

Earnings before interest, tax, depreciation and amortisation (ebitda) rose 5.6 per cent to $294.5 million, while earnings before interest and tax (ebit) were up 4.3 per cent to $229.5 million. Earnings per share were up 11.8 per cent to 28.5cps.

Auckland operating revenues rose 8 per cent to $428 million, but increased expenses reduced ebitda gain to 0.5 per cent taking it to $194 million. Higher depreciation and amortisation resulted in a 2.9 per cent decline in ebit to $154.6 million.

Gaming machine revenues rose 1.9 per cent to $194.5 million, gaming tables were up 9.6 per cent to $140.3 million, food and beverage up 11.3 per cent to $37.4 million, and hotel and convention up 44.3 per cent to $43.3 million.

Gaming revenues rose 5 per cent despite the full year impact of the smoking ban, compared to a half year impact in the previous year.

Revenues from the non-gaming and attractions sector were up 20 per cent due to a new revenue stream from the Skycity Grand Hotel ($9.9m), increased food and beverage ($3.8m) and convention revenues ($2.8m).

Higher corporate expenses came partly from increased regulatory and host responsibility costs.

Table games revenues rose 10 per cent due to new VIP facilities, international commission business, and the introduction of six poker tables, Sky City said.

Second half gaming revenues appeared to have been impacted by higher petrol prices and interest rates, and by lower international programme play.

Revenues from Adelaide operations rose 21.4 per cent to A$131.2 million ($157.4 million), with gaming up 18.1 per cent to A$114.4 million, ebitda up 53 per cent to A$27.3 million and ebit up 94 per cent to A$17.1 million.

Sky City said the percentage gains were higher than would otherwise have been the case after a disappointing performance the previous year.

Nevertheless, continuing revenue and earnings growth were clearly evident from new facilities at Southside, which had stimulated increased visitation and spending per customer.

Non-smoking legislation would have an impact on earnings from October 2007, and planning and preparatory work was well-advanced, the company said.

In Darwin, total revenues rose 9.9 per cent to A$89 million, with ebitda up 6.7 per cent to A$33.6 million and ebit up 16.7 per cent to A$28 million.

Revenue from gaming machines rose 15 per cent and gaming tables 44 per cent, more than offsetting removal of the community slots rebate from July 2005.

In Hamilton, revenues were up 14 per cent to $34.9 million, ebitda up 15 per cent to $17.4 million, and ebit up 20 per cent to $13.1 million.

Gaming revenues were up 9 per cent, gaming machines up 11 per cent and gaming tables up 4 per cent.

Revenues of $1.3 million and ebitda of $0.5 million were added to the Hamilton figures as a result of the acquisition of the Works entertainment operations, including bowling lanes and bar, on level two and the balance of the Riverside Entertainment Centre last September.

For Skycity Leisure , revenues were steady at $37.7 million but ebitda and ebit down $2 million and $2.3 million respectively due to increases in the overall cost base.

Queensgate, a new nine screen complex in Lower Hutt opened this month, with Chartwell in Hamilton (six screens) due to open next April.

The new Albany 10 screen and the relocated Manukau 10 screen complexes, both in Auckland were scheduled to open in December 2007.

Capital cost for the four projects was $44 million.

In July Skycity also moved to full ownership of Village Skycity cinemas .

The performance of Skycity Queenstown was lower than expected due primarily to reduced visitors to the Queenstown region and a lack of international player visits to the property.

Revenues were down $1.8 million which led through to reduced ebitda and ebit by $1.6m.

Sky City shares were down 22c to $5.15 in late morning trading.

- NZPA



- NZPA