SkyCity profits expected to dramatically increase in first-half
By Tina Morrison
SkyCity Entertainment Group expects first-half profit to rise as much as 30 percent.
New Zealand's only listed casino company say it will benefit from improved trading in New Zealand, higher turnover from 'high roller' gamblers, reduced costs at its struggling Adelaide property, and lower funding costs.
Net profit will be between $69 million and $71 million in the six months ended December 31, from $54.6m in the year-earlier period, the Auckland-based company said.
Earnings before interest, tax, depreciation and amortisation will increase to between $170m-$173m, from $140.9m, it said.
SkyCity, which has four casinos in New Zealand and two in Australia, said it had experienced "strong trading performances" from all its New Zealand businesses and had "strong growth" in turnover in its international business, the term it uses for high roller gamblers.
It had also achieved "significant" cost savings at its Adelaide casino, which the company singled out as an underperformer last year, and is benefiting from "significantly lower" funding costs after the deduction of capitalised interest.
Excluding adjustments for the actual 'win rate' in its high roller business, and a write down in the value of some of its non-current assets, including buildings earmarked for demolition to make way for construction of its new Auckland convention centre, first-half earnings will rise to between $83m-$86m, from $66.6m, it said.
SkyCity is due to report first-half earnings on February 11.
Its shares are rated a 'hold' according to the average rating of analysts polled by Reuters. The stock last traded at $4.16, and has gained 6.7 percent the past 12 months.