SkyCity Reported Profit Down Sharply After Darwin Impairment

By Ben Collins Features Dow Jones Newswires

WELLINGTON, New Zealand--Casino operator SkyCity Entertainment Group Limited said Wednesday its reported after-tax profit for the year to June was down sharply after an impairment at a casino in Darwin, Australia.

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The company said reported net profit after tax was down 69.2% on-year to 44.9 million New Zealand dollars (US$32.9 million). Still, normalized after-tax profit, which strips out unusual items, was up 1.3% to NZ$154.6 million.

"A number of factors contributed to our financial performance for the year including the modest growth at our New Zealand properties and lower net interest expense," said chief executive Graeme Stephens in a statement.

"This was offset by reduced turnover in our international business, and ongoing weak trading conditions in our Australian properties," he said.

SkyCity said reported earnings before interest, tax deferments and amortization or Ebitda was down 8.1% to NZ307 million, and reported revenue was down 7.2% to NZ$1.02 billion.

Normalized earnings per share fell 8.6% to 23.3 NZ cents, while reported earnings per share fell 72.% to 6.8 NZ cents, "having been impacted by the impairment of Darwin goodwill," the company said in a statement.

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The board has declared a final dividend of 10 NZ cents, taking the total payout for the twelve months to 3o June to 20 NZ cents.

SkyCity's casino in Darwin, in Australia's Northern Territory continued to face increased competition from other venues and a difficult economic environment in the region, it said.

Regulatory changes have seen the permitted number of gaming machines at other properties within the catchment area of the casino increase by 75% since 1 July 2015, SkyCity said.

Following the impairment of AU$95 million of Darwin goodwill a review has commenced to identify strategic options to maximise value from the property.

Overall, the company said Ebitda for FY18 is expected to grow modestly on the previous corresponding period.

Write to Ben Collins at ben.collins@wsj.com

(END) Dow Jones Newswires

August 08, 2017 17:56 ET (21:56 GMT)