Update On COVID-19 Impacts And Recent Trading
Trading has been encouraging since the reopening of SkyCity Entertainment Group’s New Zealand casino, entertainment and accommodation facilities in Auckland, Hamilton and Queenstown (excluding the Wharf Casino) on 14 May 2020.
Domestic customers have returned to the SkyCity properties despite limited capacity, restrictions around mass gatherings and physical distancing requirements. The domestic gaming businesses in Auckland and Hamilton have delivered very pleasing performances, particularly in electronic gaming machines (EGMs), while table game revenues have been steadily improving from a slow start.
The health and safety of customers and staff remains a key focus and SkyCity is committed to adhering to the Ministry of Health’s guidelines for operating at Alert Level 2 by currently restricting entry to all SkyCity’s New Zealand casinos to Premier Rewards members only.
The non-gaming aspects of the business will take longer to recover as they have a reasonably high international component to their customer base. Hotel occupancy has averaged around 32% over the ramp up period with much higher occupancy over the weekends (up to 90%) due to special offers. Food and beverage revenues are growing steadily, but we expect these to remain significantly lower than pre COVID-19 levels until the country moves to Alert Level 1.
The New Zealand Government recently signalled that the Alert Level 2 settings will be reviewed on 8 June and that a move to Alert Level 1 could come within the next few weeks. The reopening of the trans-Tasman border also appears increasingly likely over the next few months, however other international borders are expected to remain closed for some time.
SkyCity Entertainment Group Chief Executive Officer, Graeme Stephens, says that while SkyCity expects to be a smaller, domestically focused business for the short to medium term it is heartening to see early signs that the domestic market is recovering. Hopefully these initial positive indications are sustainable.
“SkyCity has previously announced a need to reduce its New Zealand workforce by around 700 rostered (waged) employees in order to right size it for the smaller, domestic market. Unfortunately, this remains necessary to ensure that SkyCity’s businesses are sustainable in the medium and long term and can continue to support the thousands of jobs that will still remain,” says Stephens.
With the combination of tight cost control and the revenues now being achieved, the Auckland and Hamilton properties are currently running at levels that are profitable and cash positive.
As previously announced, SkyCity continues to progress the development of a funding plan to support the business over the medium-term. “We will continue to monitor the trading performance across the business, and we expect to finalise our funding plan over the next few weeks,” says Stephens