SkyCity Entertainment cited three reasons for its 3% revenue decline in its latest half-year report.
And it is continuing to suspend dividends and wants to sell $200 million of assets.
The company said the revenue fall was due to the implementation of carded play, which dispenses with cash; lower premium table volumes, particularly in Auckland and Adelaide and less VIP activity, which the company referred to as “customer churn“.
Revenue fell from $422m in the half-year to December 31, 2024 to $411.7m in the latest half-year.
Underlying earnings before interest and tax (ebit) fell from $119.5m to $85.5m and underlying net profit after tax fell from $44.2m to $14.4m.
“Underlying ebitda [earnings before interest, tax, depreciation and amortisation] for 1H26 reflects the expected first-half earnings profile and the operational changes introduced during the period,” a SkyCity statement said.
“Gaming revenue was affected by carded play in New Zealand, lower premium table volumes in Auckland and Adelaide and VIP customer churn,” the company said.
However, those factors had been partially offset by contributions from non-gaming businesses, including food and beverage and hotels.
Total net debt was reduced from $772.4m to $594.4m.
CEO Jason Walbridge said the half-year result reflected an operational transition.
“We are undertaking a disciplined review of our operating model to ensure our cost structures reflect the current environment while maintaining our commitment to compliance and customer experience,” he said.
That points to cost-cutting and Walbridge confirmed plans for that today.
The company has engaged CBRE to sell its commercial office block at 99 Albert St, where it has its headquarters.
The office building is opposite the new central-city City Rail Link station, Te Waihorotiu.
However, trying to generate cash from other property has so far failed: attempts to lease about 3000 car parks beneath its Auckland properties have not resulted in any success.
“The Auckland car park concession process has not resulted in a proposal that meets SkyCity’s commercial objectives,” Walbridge’s statement said.
That follows the botched deal with Macquarie which was meant to lease the parks under the convention centre but were not finished in time for that deal to be done.
Walbridge said SkyCity had a significant portfolio of assets “and is actively assessing monetisation options across individual assets and potential combinations”.
External advisers were engaged and the company hoped to sell $200m of assets.
Total costs in the half-year rose, partly due to ongoing investment in anti-money laundering compliance and host responsibility obligations.
This period also included pre-opening costs for the new convention centre and further investment in online, Walbridge said.
Carded play was introduced last July and has cut gaming activity and revenue, “as expected”, Walbridge said.
However, tracing customers via the cards did give the company more information about them, he added.
Of the $200m sales, Walbridge told the Herald different assets were being examined “to look at different options we may pursue to achieve our objectives before next February”.
“We own a number of commercial buildings – the carparks and also other assets we’re considering.”
SkyCity wanted to lease just over 3000 car parks, he said.
On VIPs and customer churn, Walbridge said: “As we uplift our compliance procedures, some customers are choosing not to play with us anymore. Some are electing to moderate their level of play, and some were not able to permit themselves to play with us anymore.”
Last Wednesday, Prime Minister Christopher Luxon opened the company’s new New Zealand International Convention Centre.
That SkyCity centre and adjoining new 5-star Horizon by SkyCity hotel took 11 years to build.
The adjacent casino, the 323-room SkyCity Hotel, public areas, bars, 700-seat theatre and restaurants only took two years to build.
The casino celebrated 30 years this month.
Fletcher Construction built all the buildings for SkyCity.
SkyCity is bringing litigation against Fletcher Construction for late delivery of the New Zealand International Convention Centre.
Walbridge said today he did not envisage that going before the court this year.
SkyCity was at the discovery stage, he said.
Of the full case, Walbridge said: “We expect that will take a number of years to play out through the courts.”
Walbridge said the board would discuss dividends again at the end of this year.
SkyCity today reaffirmed its underlying ebitda guidance to be $190m to $210m for the full year to June 30, 2026.
Anne Gibson has been the Herald’s property editor for 26 years, written books and covered property extensively here and overseas.