Photo: RNZ / Marika Khabazi
Casino operator SkyCity Entertainment's first half profit has fallen as gamblers spent less, and it was hit with regulatory costs.
Key numbers for the six months ended December compared with a year ago:
- Net profit $6m vs $22.5m
- Revenue $421m vs $445.2m
- Underlying profit $38m vs $64.5m
- Interim dividend - Nil
Chief executive Jason Walbridge said trading has been tough, but it was looking for a lift as the economy improved numbers and the Auckland convention centre opens next year.
"We continue to operate in challenging market conditions with subdued consumer confidence, so we're pleased to see strength in our visitation numbers."
The number of gamblers at its four casinos increased but they spent less on gaming, while a five-day closure of the Auckland casino for rule breaches dented revenue.
In addition, the company also incurred increased interest costs after it lost a tax dispute with the South Australian government involving its Adelaide casino.
Walbridge said on the positive side its hotels, including the recently opened Horizon in Auckland, had higher occupancy rates, and the Sky Tower had more visitors.
Revenue from its Hamilton and Queenstown casinos rose while it kept control of costs.
Walbridge said SkyCity was looking at how it could make money from certain assets to reduce its debt, although the balance sheet was "solid".
However, revenue faces further pressure from the introduction of mandatory carded play later in the year, detailing how long gamblers have played, how much they gambled, and when to have a break.
"One hundred percent carded play represents a step change in host responsibility and customer care," Walbridge said.
He said falling interest rates and an improving economy should deliver improved patronage and earnings.
However, the company still reduced its full year underlying earnings forecast by $20 million to between $225m-$245m, and shareholders will go another year without a dividend.
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