SkyCityThe release of SkyCity Entertainment Group’s (NZX/ASX:SKC) financial results this week has revealed the extent lockdowns hurt the New Zealand casino group.
SkyCity reported on Thursday a hugely reduced underlying profit as the Covid pandemic and subsequent lockdowns decimated its operations.
Key numbers for the year ended June (millions of $) vs a year ago
- Net loss $33.6m vs profit $155.8m
- Normalised profit $9.7m vs $90.0m
- Revenue $639m vs $952m
- Normalised revenue $631.5m vs $822.5m
- Final dividend – nil vs 7 cps
Earnings had plummeted due to the casino closures and the complete lack of tourism. SkyCity’s flagship casino in Auckland was closed for 107 days out of the year. As a result, the venue saw revenue of NZ$330.6 million (US$205.36 million), a 32.3% decline. Meanwhile in Australia, things fared a little better for the casino operator. However, revenues were still lower. SkyCity’s casino in Adelaide, Australia, reported a decline of 6.3% to NZ$206.4 million (US$128.23 million).
The normalised net profit, which excluded one off items such as commissions and changes in asset values, surpassed expectations. However, overall profit was still behind the pre-COVID levels of 2019.
SkyCity Entertainment Group’s (NZX/ASX:SKC) Signs of Recovery
Despite the weak financial results, it was not all doom and gloom. Chief executive Michael Ahearne said business was returning to more normal operation and there were clear signs of recovery.
“Following the relaxation of operating restrictions during the final quarter of the 2022 financial year, SkyCity has seen the strong performance from its local gaming businesses in New Zealand continue into the 2023 financial year and improved performance from SkyCity Adelaide.”
The online casino launched just before the start of COVID in 2019 and based in Malta for legal reasons, saw its earnings jump by 29 percent from the previous year. The online casino side of SkyCity’s business was now “a meaningful contributor” to group earnings, accounting for 9 percent of operating earnings.
