SkyCity posts lower first-half profit, sees 2H pickup
SkyCity posts lower first half profit as expected, signals earnings growth in second half
By Tina Morrison
Feb. 12 (BusinessDesk) – SkyCity Entertainment Group, New Zealand’s only listed casino company, posted lower first half profit in line with guidance and said earnings will grow in all its businesses in the second half.
Normalised profit was $66.4 million in the six months ended Dec. 31, in line with the $65 million to $68 million forecast in December and down from $72.1 million a year earlier, the Auckland-based company said in a statement. The figures exclude earnings from the Christchurch casino sold in December 2012. Normalised revenue fell to $467 million from $493.4 million in the year earlier period.
SkyCity, which has four casinos in New Zealand and two in Australia, said it expects earnings growth in the second half year as positive changes at its Adelaide and Darwin casinos outweigh a challenging macro-economic environment in Australia and as the company benefits from a more buoyant New Zealand economy.
“While the 1H14 had been a challenging period due to the high NZD and continued soft consumer spending on both sides of the Tasman, solid progress had been made in establishing the platform for growth and the outlook for 2H14 is encouraging,” chief executive Nigel Morrison said in the statement.
The New Zealand dollar bought an average 88.20 Australian cents in the first half, compared with 78.36 cents in the year earlier period, crimping returns from the company’s Australian units, it said.
Normalised revenue in January, the first month of the second half, rose 11.9 percent from the year earlier month, SkyCity said. Including the impact of a higher New Zealand dollar, revenue for the month increased 5.4 percent, the company said.
Trading in February has also started well compared to the prior year as the company’s casinos benefited from strong Asian visitation over the Chinese New Year period, which started on Jan. 31, SkyCity said.