Sky City is warning that its full-year earnings will take a $60 million hit from budget tax changes reducing the corporate tax rate and removing building depreciation.As well as the one-off $60 million deferred tax liability adjustment, the hotel and casi
Sky City is warning that its full-year earnings will take a $60 million hit from budget tax changes reducing the corporate tax rate and removing building depreciation.
As well as the one-off $60 million deferred tax liability adjustment, the hotel and casino operator said the changes would increase the amount of New Zealand income tax it pays by about $2 million a year, from next July.
Excluding the tax adjustment, Sky City now expects net profit for the year to June 30, 2010 to range between $136 million - $140 million.
This figure includes the $10 million gain on divestment of the cinemas business.
Sky City said the lower forecast did not impact underlying profitability and cash flow and would have no impact on its dividend policy of banking covenants.
Budget tax changes involve the reduction in the corporate tax rate from 30% to 28% and removal of the ability to depreciate buildings (for tax purposes) with an expected useful life beyond 50 years.
Shares in Sky City rose 2c yesterday to close at $2.86 last night.
