Jason Walbridge started as SkyCity CEO in July, 2024. Photo / Jason Oxenham
Jason Walbridge started as SkyCity CEO in July, 2024. Photo / Jason Oxenham
Entertainment company SkyCity’s full-year finances this week will include a non-cash impairment of $94.3 million related to its troubled Adelaidecasino and new debt totalling $465m.
The writedown related to more legal and compliance costs associated with its Australian casino and the introduction ofmandatory carded play there in 2026.
“The impairment is a non-cash accounting adjustment at balance date,” new SkyCity chief executive Jason Walbridge wrote in the market announcement on Monday morning.
“SkyCity Adelaide continues to be a strategically important asset within the wider SkyCity Group.”
Jason Walbridge started as SkyCity CEO in July, 2024. Photo / Jason Oxenham
The impairment related to an expected decrease in future cashflow and arose following an annual impairment review of all of SkyCity’s cash-generating properties ahead of its full-year financial result to be released on Thursday.
“The primary objective over the coming years is to ensure SkyCity has strongly performing risk management systems, a culture which prioritises compliance with SkyCity’s obligations and customer care, and a business which is seen as a good corporate citizen, worthy of retaining its casino licences,” the company announcement said.
“SkyCity is committed to implementing mandatory carded play across its casinos as this will significantly increase its visibility and control of customer play, and simplify many parts of its current AML/CTF and host responsibility operations.”
“SkyCity notes that it continues to hold prudent levels of committed liquidity headroom,” the company said in June.
SkyCity has already warned it expects to pay a civil penalty over anti-money laundering breaches at its Adelaide casino (pictured above). Photo / Supplied
Separately, following a legislative change, its deferred tax liabilities in New Zealand would increase by $129.6m after the Government removed the ability for companies to depreciate commercial properties with an estimated life of 50 years-plus.
The new impairment and tax adjustment would not impact the company’s underlying earnings nor its underlying net profit for the year to the end of June.
The company had already downgraded its earnings expectations for the year twice, in December and June, due to the challenging economic environment resulting in reduced gaming revenue, and a delay in the opening of its Horizon Hotel in Auckland.
It expected underlying earnings before interest, tax, depreciation and amortisation of $280 million to $285m for the year to June 2024, instead of an earlier revised estimate of $290m to $310m.
It expected underlying group net profit of between $120m and $125m, compared to an earlier forecast of $125m to $135m.
Debt pile grows
SkyCity’s new debt includes $247m from its United States private placement programme for a fixed term of seven years from the draw-down date of September 16 this year.
The debt would mature incrementally in 2028, 2030 and 2031.
The company also extended tranches of debt worth $218m with two of its existing banks.
That would extend the date of its debt maturing with banks to 2027 at the earliest, from a previous date of June next year.
It now had a total of $275m in revolving credit facilities available to it.
“We are very pleased to have finalised these key funding extensions and would like to thank both our bank syndicate and USPP lenders for their ongoing support.” Walbridge wrote in the market announcement.
“With this important refinancing in place, we can continue to focus on our business transformation programmes and opportunities in front of us.”
SkyCity Entertainment Group is due to report its 2024 financial year result on Thursday, August 22.
Madison Reidy is host and executive producer of the NZ Herald’s investment show Markets with Madison. She joined the Herald in 2022 after working in investment, and has covered business and economics for television and radio broadcasters.
