SkyCity posts 4% dip in 3Q revenue as Australia struggles, Auckland flat
SkyCity Entertainment Group posted a 4 percent decline in third-quarter sales as its Australian businesses in Darwin and Adelaide continued to struggle while its flagship Auckland casino dealt with flat gaming revenue and the loss of its Air New Zealand Koru catering contract.
Group revenue fell to $258.1 million in the three months ended March 31 from $268.9 million a year earlier, the Auckland-based company said in a statement. SkyCity's Auckland casino, the company's largest, reported a 1.5 percent dip in revenue excluding international business to $141.8 million, of which $2.5 million to $3 million came from the loss of the Koru catering contract. On a like-for-like basis, SkyCity said Auckland's sales were up 1.2 percent with modest growth in its non-gaming revenue and flat gaming revenue.
Sales at the Adelaide casino fell 1.8 percent to A$36 million and SkyCity said the property will post a weaker second half as it deals with flat revenue and growing pressure on its margins, while its Darwin operation reported a 5 percent fall in revenue to A$23.2 million in the face of tough trading conditions and competitive pressures.
SkyCity's revenue from its international business for high-rollers rose 5.1 percent to $38.2 million on a normalised basis, which adjusted for a theoretical win rate of 1.35 percent against an actual win rate of 1.27 percent, due to strong activity through the Chinese new year holiday. In actual terms, revenue from the international business was down 2.3 percent.
Its Hamilton casino increased sales 5.7 percent to $14.3 million and its Queenstown businesses posted a 12 percent drop in revenue to $2.8 million.
In February, the company posted an 18 percent gain in first-half profit to $83.8 million as stronger trading in Auckland offset the weaker Australian businesses and SkyCity today said it expected its biggest unit to achieve "modest earnings growth" in the second half.
SkyCity shares last traded at $4.49 and have gained 14 percent so far this year.