SkyCity Starts Strategic Review of Darwin Casino, Flags A$95 Million Impairment

By David Winning Features Dow Jones Newswires

SkyCity Entertainment Ltd. (SKC.NZ) said it would take a 95 million Australian dollar (US$75.4 million) impairment charge against its Darwin casino in northern Australia, while launching a review "to maximize value" from the property.

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SkyCity blamed the writedown of goodwill on competitive pressures following the Northern Territory government's unexpected decision to remove the cap on gambling machines in December 2014.

"Since the implementation of that policy in July 2015 there has been a 75% increase in the number of gaming machines in Darwin (outside of the casino)," SkyCity said. "This significant increase in competing gaming machines in the catchment area of the casino has consequently had an increasingly adverse impact on revenue and earnings at SkyCity Darwin since the beginning of 2016."

SkyCity said the impairment charge would be recognized in its accounts for the year to June 30. It expects to release the 2017 fiscal result on Aug. 9.

Following the impairment, SkyCity said the book value of the Darwin casino would fall to A$195 million.

"A review is underway to identify strategic opportunities to maximize value from the Darwin property," SkyCity said, without being more specific, including whether the casino is up for sale.

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-Write to David Winning at david.winning@wsj.com

(END) Dow Jones Newswires

July 25, 2017 17:10 ET (21:10 GMT)