Casino, restaurant and hotel business Sky City Entertainment has hugely boosted its reported net profit after tax by making $328 million, up nearly 300 per cent on the previous $82.8m.
But normalised net profit after tax, which excludes revenue from one-off sales, was $75m, down 16 per cent in the half-year.
SkyCity said the results were "complex" and significantly impacted by two events: the NZICC fire and gains from the Auckland car park sale.
Revenue got a massive boost. It shot from $411.4m in the first half of the June 30, 2019 year to $721.7m in the June 30, 2020 year.
The fire and carpark sales explain the discrepancy between normalised profit and reported profit.
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Graeme Stephens, chief executive, told the Herald this morning he would be talking to analysts today about the normalised, not reported, profit because reported profit was "ridiculously high. The bulk of the increase is in the fire," he said, pointing to a massive one-off $240m figure due to that disaster.
The half-year accounts included $225.8m from contract works insurance recovery, $10.3m from liquidated damages for Nelson St tunnel access and a further $4.5m in other insurance recoveries.
"But I'd prefer normalised profit as it strips out the financial gains from the fire and carpark sales," Stephens told the Herald.
"And yes normalised is down 16 per cent due to some impact from the fire. The ultimate message is that the business in New Zealand has performed well, including Auckland up 6 per cent and Hamilton and Queenstown with double-digit growth and we're happy with that in line with a more challenging global environment.
"The weak point in our results is international business," he said, citing a slowdown from Asia, particularly payment restrictions in Macau.
"IB has been disappointing but New Zealand has performed satisfactorily. That's the key results message."
Stephens acknowledged intense interest in the effects of coronavirus on SkyCity "but that broke out after December 31," he said, emphasising no effects were recorded in the accounts. Some Auckland table revenue had been weaker in the last three weeks but that might be due to renovations, he said.
International business was not doing well before the outbreak and SkyCity has now adjusted its outlook: "We're saying we will be slightly below guidance given at the start of the year, largely due to IB," Stephens told the Herald.
On the NZICC, Stephens said: "Is it going to be built in time for APEC? The answer is no. We have been working closely with Fletcher and they have a vision of a programme and we expect to get that by the end of February. They reached the conclusion it's highly unlikely they can get everything right by 2021 so we can't commit to delivering APEC," he said, although some car parking facilities under the new centre could be functioning by later next year.
Stephens said around 180 vehicles remained trapped on level B4 underground: "There's mould, the cars are a writeoff and insurance has kicked in. Removing them has been a focus and it's imminent. We must do that safely."
The Herald reported this week on how coronavirus and the NZICC were two key issues for the company.
Shane Solly of Harbour Asset Management said the investment community would be looking closely at how the business could be hurt due to a ban on Chinese travellers coming here.
"Key points include indications on the early impact of coronavirus on trading and potential ramifications over the next six to 12 months," Solly said of a business with a market capitalisation of $2.4 billion and which made $14.1b from the international business last year.
Chinese gamblers are a huge source of revenue for SkyCity whose most profitable casino is Auckland although it is spending A$330m on its Adelaide casino and has properties in Hamilton and Queenstown.
Forsyth Barr said this week: "We expect low underlying growth with downside risk to outlook and FY20 guidance from lower Chinese inbound visitor numbers."
But today's result would probably be complicated by some one-off sales including SkyCity's Darwin casino property as well as the long-term leasing or concessions of its Auckland CBD carparks, ForsythBarr said.