Sky City’s highroller gamblers were taken to the cleaners by the house this year – a reverse of last year, when the exact opposite occurred.

The casino group reported a net profit after tax for the 2008 financial year of $111.9 million (excluding $62 million of non-recurring items, mainly attributable to the $58.4 million cinema writedown), but a normalised post-tax profit of $102 million.

This figure is adjusted for a much higher win rate through Sky City’s International Business division – which caters for VIP gamblers – than the theoretical level expected.

That business unit’s net win of $22.6 million was nearly three times the figure of $8.9 million that it should have been, contributing to a 260 per cent growth in divisional ebitda to $17.2 million.

Skycity’s overall ebitda (again, ignoring the cinema writedown) was up 6.1 per cent to $311.2 million, with the growth mostly attributable to the International Business results.

In 2007, the actual win rate was below the theoretical, meaning the VIP division was a drag on the company’s overall performance.

Sky City chief executive Nigel Morrison said a main focus of the management team was to improve the division’s turnover from $1.4 billion to $3 billion, which would smooth out this volatility.

He identified the Darwin casino as a key part of this plan, due to its location close to the Asian markets.

Darwin was the biggest success story of Sky City’s 2008 results, improving its revenue by 7.7 per cent and its ebitda by 13.9 per cent, to $40.1 million.

Auckland, the main driver of Sky City’s performance, had a flat year, as did the other New Zealand-based properties.

Adelaide’s figures were negatively affected by a smoking ban introduced last November, although Mr Morrison said the damage had been less than anticipated.

Sky City has axed plans to build a carpark at the Adelaide property, due to regulatory restrictions on gaming tax and not being allowed to install bill acceptors on gaming machines.

“The controls over that casino are so tight … I can’t see any possible justification for spending $30 million on a carpark,” Mr Morrison said.

Former management teams had talked up the carpark as critical to attracting people to the Adelaide casino.

Bringing up the rear for performance in 2008 was Sky City’s cinema division, which the company tried and failed to sell earlier this year.

The brutal $58.4 million writeoff of the cinemas’ carrying value was announced to the market in February, slashing more than half of Sky City’s full year profit.

The division’s full-year operational performance was below par too, with ebitda falling 44.8 per cent to just $4.8 million.

Mr Morrison said a new management team led by Jane Hastings, and new initiatives like showing Bollywood and Chinese language films, were expected to provide a much better showing in the 2009 financial year.

This focus on the Asian demographic was also seen in some successful marketing campaigns run by the casino: an 08/08/08 promotion to attract people to the casino on the date, which was auspicious according to Chinese numerology, saw the busiest gaming day at the Auckland casino in four years.

Skycity said trading in the 2009 financial year so far was “satisfactory” and the focus for the year was on getting existing assets to perform better rather than looking at any new acquisitions.

No new capital expenditure projects are planned, although the company expects to book $A18 million from the continuation of the Darwin upgrade and $8 million related to the construction of a cinema complex at Manukau, which opens next month.

Mr Morrison has hired a swag of new faces in management – so many that after only starting with the company in March, he is now the third-longest serving senior executive.

Industrial action is continuing at the Auckland property as union members tussle with Skycity management for better pay and working conditions.

Mr Morrison said the strikes were a “thorn in our side” but were having no impact on customers’ experience at Sky City.

Further negotiations with the unions are planned for this week.