SkyCity first-half profits drop 16pc

The Sky Tower at SkyCity's Auckland casino headquarters. Photo / NZ Herald

SkyCity Entertainment Group, the Auckland-based casino and hotel company, said first-half profit fell 16 per cent on a lower win rate for international business and year-earlier Rugby World Cup benefits that weren't repeated.

Net profit fell to $66.3 million, or 11.5 cents a share, in the six months ended December 31, from $78.8 million, or 13.7 cents a share, a year earlier, the company said in a statement. Revenue, including gaming GST, fell 1.4 per cent to $487.3 million.

Profit missed the $75.9 million forecast by First NZ Capital and SkyCity today gave a mixed outlook statement, saying there are "indications of growth returning in New Zealand" while the performance of Adelaide would be "broadly flat" through the remainder of the year and Darwin should show growth as it benefits from investment.

The company said normalised full-year profit is expected to be about $140 million. In October it forecast profit on that basis "in the $140 millions" though it subsequently sold is stake in Christchurch Casino, which had generated $3.1 million in the second half of last year.

The company lifted its interim dividend to 10 cents a share from 9 cents a year earlier, saying it reflected its new dividend policy of making an annual payment of not less than 20 cents and not less than 80 per cent of normalised profit.

The shares, which are rated 'outperform' based on the consensus of analysts polled by Reuters, last traded at $4 and have gained 6.4 per cent this year.

Meanwhile, chief executive Nigel Morrison today said Manila presented the business with exciting opportunities.

Speaking to a media briefing after today's half-year result, he said many Chinese people visited the Philippines and SkyCity was investigating prospects there.

New licenses had been granted and SkyCity, with its existing operations in Australasia, had the experience to move onto that area of the world, he said.

SkyCity said the $12.5 million drop in first-half profit including $4.7 million negative impact from the Rugby World Cup and an $8.4 million impact from a softer international business win rate of 1.06 per cent compared to 1.64 per cent in the first half last year. The theoretical win rate is 1.35 per cent.

Normalised profit , which includes the theoretical win rate and excludes certain one-time costs and gains, fell 3.4 per cent to $74.4 million.

SkyCity Auckland, the company's flagship facilities, recorded a 1.9 per cent decline in total revenue to $263.7 million. Of that, slot machine revenue fell 7.9 per cent to $108.6 million, revenue from local tables gained to $61.8 million from $60.5 million and international tables, normalised, climbed to $28.8 million from 18.6 million.

Food and beverage sales rose to $24.1 million from $23.1 million, hotels and conventions fell to $30 million from $36.9 million while revenue from the Sky Tower and parking fell to $10.4 million from $11.9 million.

Gross gaming revenue at Adelaide edged up 0.4 per cent to A$74 million, while food, beverage and other sales slipped 4.5 per cent to $8.5 million.

SkyCity Darwin recorded a 12 per cent gain in gross gaming revenue to A$54.9 million, while food, beverage and hotel sales jumped 18 per cent to A$17.2 million.

SkyCity Hamilton's gross gaming revenue rose 5 per cent to $23.2 million and food and beverage rose 2.3 per cent to $4.5 million. SkyCity Queenstown gross gaming revenue fell 2.9 per cent to $3.4 million while food and beverage sales rose to $600,000 from $500,000.