SkyCity VIP revenue down, net profit up in FY17H1

SkyCity Entertainment Group recorded a near 40 percent drop in its international business segment but still managed an 18 percent increase in profit for the half-year ended Dec. 31, 2016.

The NZ-listed casino company said on Thursday that net profit for the six months was NZ$83.8 million (US$60.8 million).

Revenue came in at NZ$484.2 million, down 5.7 percent from NZ$513.7 million in the prior-year period.

“The main drivers of the 17H1 performance were solid growth in our combined New Zealand properties, offset by reduced turnover in our International Business, continued competitive and economic pressures in Darwin and a weaker Australian dollar,” said SkyCity’s interim chief executive officer John Mortensen.

“Pleasingly however, trading at our flagship property at SkyCity Auckland improved significantly in 17Q2, with strong growth across all business segments,” he said.   

Revenue at its Auckland casino rose slightly to NZ$283.9 million.

SkyCity Hamilton also saw a rise in revenue, to NZ$29.6 million in the half year, reflecting a strong local economy.

Its international business took a hit however, recording a decline of 38.7 percent year-on-year to NZ$4.4 billion, while normalized EBITDA was down 68.6 percent to NZ$7.1 million.

The company said its was “adversely impacted by increased restrictions of funds transfers and reduced visits by larger customers.”

It added that it expects the international business segment to continue to weaken given reduced visits expected from larger VIP customers and recent developments in China.

It however, added that it “continues to comply with all relevant laws in China and take a conservative approach to issuing credit to VIP customers”.

SkyCity declared an interim dividend of 10 cents per share.