Jason Walbridge started as SkyCity CEO in July, 2024. Photo / Jason Oxenham
Listed casino and hotel giant SkyCity Entertainment Group made a $143.3m reported net loss after tax for the year, citing a tough operating environment.
New chief executive Jason Walbridge referred to “a very challenging financial year”.
He said a soft economy, cost-of-living pressures here and in Australia and various regulatory matters had impacted the business.
The company’s result is for the year to June 30, 2024.
Group revenue rose 0.3% to more than $900m and underlying group net profit after tax was $123.12m.
That was down due to accounting adjustments including an A$86.2m impairment on SkyCity Adelaide and a $129.6m tax adjustment after tax law changes here, flagged to the market this month.
The company has suspended dividend payments until 2026 and Walbridge started last month, replacing Michael Ahearne.
Net debt increased from $444m in FY23 to $663m following the buy-back of the Auckland car park concession and core capital expenditure during the year of $64m.
The company confirmed previous FY25 earnings guidance of underlying group Ebidta of between $245m and $265m and no dividend expected for FY25.
A major transformation programme was under way to de-risk the business with a focus on building capability to ensure better compliance with regulatory requirements, the company said.
Preparations were under way for the opening of the New Zealand International Convention Centre and the regulation of online casino gambling in New Zealand.
SkyCity has agreed to shut for a week next month after a deal with the Department of Internal Affairs for breaching its own host responsibility programme.
A gambler at SkyCity Casino in Auckland spent more than nine hours continuously playing pokies without any interaction with staff and there were 23 occasions when he played uninterrupted for several hours.
The company will shut its Auckland casino from Monday, September 9 to Friday, September 13 but associated restaurants and tourist attractions will stay open.
In June, the company downgraded its earnings expectations for the 2024 financial year and suspended dividends for two years, citing the “challenging” economy and delays opening its new Horizon Hotel and problems in Adelaide.
That was the second earnings guidance downgrade for the casino company after one in December that had profit forecasts pegged back due to lower pokie machine revenue and higher compliance costs.
SkyCity said in June this year it expected “underlying” earnings before interest, tax, depreciation and amortisation (ebitda) of $280m to $285m, instead of its earlier revised estimate of $290m to $310m.
Underlying group net profit could be between $120m and $125m, compared to its earlier forecast of $125m-$135m.
The company also said it was suspending dividend payments to shareholders until 2026, noting that it expects to pay a penalty of A$67m ($73m) for anti-money laundering breaches at its Adelaide casino.
Anne Gibson has been the Herald’s property editor for 24 years, written books and covered property extensively here and overseas.
'This is not surprising given the ongoing issues in the market' - Steve Gracey of RLB.