SkyCity expects core annual net profit to fall after tax charge
By Rebecca Howard
May 1 (BusinessDesk) - SkyCity Entertainment Group lowered its full-year guidance slightly after year-to-date trading was softer than expected and after the earlier settlement of the Darwin casino sale.
The casino operator now expects its normalised earnings before interest, tax, depreciation and amortisation for the year ending June 30 to be flat on the previous year. This contrasts with a prior forecast for 5 percent growth when it announced its first half result in February. That earlier forecast was based on the A$188 million sale of its Darwin casino to US hospitality company Delaware North settling on June 30. The sale, however, was completed on April 4.
Sky also said it expects its group normalised net profit to be slightly below the prior year, rather than slightly above, as it had forecast previously. This reflects an increase in the effective tax rate that will have a $6 million impact, it said.
In the year-to-date to April 28 it said its group normalised revenue was up 4 percent on the same period a year earlier while domestic revenue, excluding its international business, was flat. The group reported revenue was down 2 percent on the same period due to a low international business win rate.
Regarding its different markets, it said year-to-date revenue was slightly higher in Auckland and stable in Hamilton. In Australia, it pointed to weaker revenue performance in Adelaide due to increased disruption from construction works. Performance in the now sold Darwin casino was slightly below expectations due to ongoing challenging conditions.
In its international business, it still expects to achieve turnover of around $13 billion to $14 billion in the full year.
The stock closed yesterday at $4.08 and has fallen 34 percent so far this year.