The $2.4 billion SkyCity Entertainment Group is showing its hand in its battle against the crippling effects of the pandemic and lockdowns costing it an eye-watering $1 million a day in Auckland alone.
Selling non-core assets, entering discussions with its funders, banning non-vaccinated people and issuing new dates on two showcase Auckland projects are some of the revelations from Friday's online AGM.
Irish-born CEO Michael Ahearne sounded his usual enthusiastic, upbeat self when he took the podium.
But his message was a sombre one, as he told shareholders about the challenges Covid was posing, particularly of Auckland, shut 72 days as of Friday. That hits earnings by $1m per day, let alone the Hamilton casino's closure.
The business declared $590m borrowings in its June 30, 2021 results, so the stakes are high. Ahearne also revealed the company was talking to financiers about debt covenant waivers.
No high-rollers jetting in from overseas, hotel rooms empty due to lack of travel, no cruise ship passengers riding Sky Tower lifts, building sites numbed during alert level 4, restaurants and bars shut because of lockdowns - SkyCity isn't able to play its best hand right now.
Luck has never been on the casino giant's side with delays to its new five-star Horizon Hotel in Auckland or the fire at the $750m NZ International Convention Centre, costing $336m to fix.
Further setbacks via weeks of no work means that instead of the hotel opening soon, it won't now be completed until 2024 and the NZICC until 2025.
It was 2015 that NZICC work started so the completion dates seem almost ridiculous now, dogged by fire and pandemic lockdowns.
"The NZICC and construction partner Fletcher Construction announced the beginning of the first phase of work, formally kicking off the 38-month building project," the convention centre business said on December 24, 2015.
How sad is that, in hindsight?
It's now six years or 72 months later. The centre is far from finished. NZICC work will have taken around 120 months and an entire decade even if the new 2025 deadline announced today is met, rather than just over two years first forecast.
The surprise, sudden resignation late last year of ex-CEO Graeme Stephens also hangs over SkyCity. He isn't mentioned and hasn't emerged in any public way in business elsewhere in Auckland.
In July, SkyCity said it had negotiated a new deal with the Government on the convention centre's long-stop date, pushing it out from January 2025 to December 2027. The additional time provides it with a buffer between the programme date and its deal with the Government.
Shareholders fret about that convention centre. One put a question to today's meeting about whether work was going according to plan in the board's view and if all future costs were covered by insurance. Chairman Rob Campbell said there was no change and "overall we consider it's under control".
But perhaps one of today's bigger surprises was Ahearne mentioning almost in passing talks with funders. Although he said the balance sheet was strong and the company had headroom of $240m, he gave a worrying signal about repayments.
"In response to the ongoing Covid-19 disruptions in New Zealand and in particular the prolonged lockdown in Auckland, we have prudently engaged with our financiers to discuss a debt gearing covenant waiver for our December 2021 testing period to enable full access to our committed liquidity headroom," Ahearne told shareholders.
Nor has fortune favoured SkyCity in the Northern Territories. It hasn't sold its Darwin site it bought years ago when it planned to expand its casino there. In overhead slides, the company referred to the sale of non-core assets including land in Darwin at Little Mindil as well as non-operational New Zealand property. It announced the Darwin casino sale in 2018, yet apparently hasn't been able to sell the adjoining site where it once planned to expand.
But overall, Ahearne's presentation was upbeat, stressing many positives, concluding that it was a "great company", with world-class assets.
Ahearne cited in passing getting the Government's wage subsidy. He didn't say how much. Work and Income showed SkyCity Management claimed $21.6m for 3272 employees and a further $2.7m extension for 2219 employees.
Matt Goodson of Salt Funds Management was not at all surprised by the AGM announcements.
"These are obviously the temporary impacts from Covid," he said, citing the company's strong resilience after earlier lockdowns.
"Just look at TAB turnover at the moment, it's booming. Gambling globally is booming. People have nothing else to do," Goodson said.
"So there's a clear expectation that this is a temporary impact, although somewhat more elongated than people expected. Most investors are largely looking through this," Goodson said of the company's outlook from the institutional investment community.
Asked if SkyCity saying it negotiating with the financiers was any reason for concern, Goodson also dismissed that, saying it was just one of many companies which had entered into such discussions. That wasn't unusual these days.
"If they need a waiver, it would not be a big surprise," he said.
Nor was it any shock that hotel and NZICC completion dates were pushed out by Fletcher Construction.
All that was entirely predictable and risk factors could easily be priced into the analysis of the business, Goodson said.
Adrian Allbon, a Jarden Securities analyst, said his expectation of a $55m cut to ebitda for the June 30, 2022 year "might not be deep enough" but he is also unconcerned about negotiations with bankers, saying Auckland International Airport did that too.
"It's not SkyCity's fault they can't open the doors. They have shown a range of capital management disciplines and constraints," he said, citing equity raising and taking wage subsidies.
Whatever the future holds for shareholders one thing is certain: they will be hoping for a better hand soon.