The New Zealand operator SKYCITY Entertainment Group announced its forecast concerning its financial performance during the first half of 2016. The company boosted its estimates of first half earnings by 30%. SKYCITY representatives pointed the strong trading in Queenstown, Auckland and Hamilton-based venues as the main reason for the considerable jump.
Company’s international venues are also expected to have a great contribution to the impressive increase. SKYCITY officials rely on high-rollers who often seek gambling opportunities in New Zealand and Australia due to the intense anti-corruption campaign in Macau.
According to preliminary statistics, the net income for the H1 of 2016 is to reach $NZ71 million, which is 30% more than the numbers reported during the same period in 2015.
As far as earnings before EBITDA are concerned, an increase of up to 17% is expected to be reported.
The New Zealand’s economy and the gambling sector, in particular, was in danger of experiencing a rapid slowdown during 2015, but the strong results from the last few months of 2015 and the increased number of tourists contributed to the good numbers reported by SKYCITY.
Another factor that boosted company’s earnings was the cost reduction for their Adelaide casino property, which has been underperforming lately. Yet, SKYCITY is determined to bring its old glory back and as a result, it invested a considerable amount in renovation and expansion.
However, SKYCITY officials remain cautious about the EGM market nature. According to revealed information, it is still uncertain as to whether SKC will be able to leverage the Adelaide investment and report an increase in revenue given the fact that the venue will have its car park no earlier than 2019. In addition, the local EGM market is said to develop too slow.
The Darwin casino is also a property of SKYCITY, but its financial performance was not satisfactory given the economic revival the city has experienced recently.
The main earnings generator of SKYCITY Entertainment is the SKYCITY Casino, based in Auckland and featuring a hospitality complex as well. SKYCITY Casino is considered a monopoly-style complex located in an international city. Therefore, it is almost impossible for its rivals to generate substantial profits. The casino has been reporting excellent numbers and SKYCITY officials are determined to make it a main tourist attraction in Auckland.
The official results concerning SKYCITY’s financial performance are expected to be released on February 11th.
