Casino operator SkyCity has made a first half loss with operations affected by Covid-19 related disruptions.
File image. Photo: RNZ / Cole Eastham-Farrelly
The company, which operates the Auckland, Hamilton, Queenstown and Adelaide casinos, reported a net loss of $33.7 million for the six months ended December versus $77.9m in the year earlier.
"Covid-19 has continued to extensively impact the business and operations at each of SkyCity's properties in the first half of the financial year," chief executive Michael Ahearne said.
SkyCity Auckland was closed for 107 days, SkyCity Hamilton (65 days), SkyCity Queenstown (22 days) and SkyCity Adelaide (eight days).
"When permitted to reopen, the properties have operated under significant constraints due to restrictions on mass gatherings and physical distancing requirements," he said.
The normalised net loss was $19.5m, which smoothed out variations in the win rate of its international high rollers business.
Revenue fell 36 percent to $289.8m, while normalised revenue dropped a third to $260.8m.
SkyCity said local gaming activity was performing well when fully operational, as was its Malta-based online business.
Late last year, SkyCity invested $40m into Malta-based Gaming Innovation Group to support its online sport betting platform.
"The performance of the SkyCity Online Casino business has been a real highlight for the period, again exceeding expectations with significant growth in revenue, EBITDA (underlying profit), and customer numbers," Ahearne said.
SkyCity supported the regulation of online gaming in New Zealand and was preparing for a regulated industry, he said.
The medium-term outlook was seen as positive and Sky was targeting a return to pre-Covid-19 earnings.
"Turning to the outlook for FY22, we will continue to focus on navigating through the ongoing uncertainty and near-term challenges presented by Covid-19 while ensuring financial resilience through ongoing cost and capital control and effective cash management."
Market analysts said the result was disappointing, with the loss bigger than Forstyth Barr's outlook, but in line with what Jarden was expecting.
They expected the Omicron Covid-19 variant to further disrupt SkyCity's earnings in the near-term, with a rebound to follow, with a positive medium-term outlook.
Work on the fire-damaged international convention centre and Horizon Hotel in Auckland was complex but Fletcher Construction was making progress, Ahearne said.
The Horizon Hotel was expected to be completed during 2024 and the NZICC during 2025.
SkyCity said it had also enhanced its anti-money laundering programme with key senior level appointments.
The action followed Australia's financial crimes agency AUSTRAC investigation into potential serious non-compliance with the laws at SkyCity's Adelaide casino, last June.
The company's share price was down nearly 5 percent in late afternoon trading.
Key numbers (six months ended December 2021 vs six months ended December 2022)
- Net net loss: $33.7m vs $77.9m net profit
- Normalised net loss: $19.5m vs $43.2m net profit
- Revenue: $289.6m vs $449.9m
- Normalised revenue: $260.8m vs $386.9m
- Operating expenses: $207.3m vs $236.2m