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SkyCity’s full year reported earnings guidance reduced

SkyCity Entertainment Group has reduced its reported earnings guidance for the fiscal year following the impairment in the value of its Adelaide casino.

SkyCity

The New Zealand casino operator stated its normalised earnings for the year ending 30 June, is expected to remain similar to previous guidance released on 17 June, with normalised EBITDA now between  AU$199m (US$142.9m) and AU$202m, from AU$185m to AU$205m previously.

This is due to higher estimates for an insurance pay out on the damage to the New Zealand International Convention Centre and Horizon Hotel, following a fire last October.

However, the potential increase has been offset by an impairment of its Adelaide casino’s book value of AU$150m, made against the AU$283m intangible asset value of the venue’s casino licence.

As a result, the operator’s updated reported EBITDA forecast is now AU$346m to AU$349m, down from previous estimates of AU$440m to AU$480m.

That also means reported net profit after tax (NPAT) has fallen from an expected AU$330m to AU$360m in June’s forecast, down to between AU$234m to AU$236m.

The operator said: “The reduced earnings outlook for Adelaide Casino has been exacerbated in the short-to-medium term by the recent and expected ongoing impacts of COVID-19, including an expectation that International Business activity may take some years to recover.”

Earlier this week, SkyCity announced its Auckland casino will remain closed until at least 26 August, after re-shutting its doors on 12 August, due to the New Zealand government’s extension of local lockdown restrictions.

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