SkyCity shareholders get another knock as casino operator’s profit drops 73%
Thursday, 20 February 2025
SkyCity Entertainment Group has reported a 73% fall in its first half net profit after tax.
The company, which operates casinos and entertainment facilities in Auckland, Hamilton, Queenstown and Adelaide in Australia, said its profit for the six months to the end of December fell $16.5 million to just $6.1m.
The result came on the back of a 5.2% drop in revenue, though the number of visitors to SkyCity’s casino and entertainment complexes had risen.
Chief executive Jason Walbridge said the company continued to operate in a challenging market with subdued consumer confidence.
Gaming revenue in Auckland was hit by a five-day closure ordered by the Department of Internal Affairs after it found the casino had breached its host responsibility obligations.
Long-suffering shareholders have seen the casino-operator’s share price fall by 25% in the past 12 months, and it fell from just over $2.50 in February 2023 to just under $1.50 on Wednesday.
They were also not paid a dividend in 2025 as the company faced challenging economics in New Zealand and Australia, including high inflation, which had led to punters spending less.
But some SkyCity’s woes were of its own making.
These include historic anti-money laundering and responsible gambling host responsibility failures in Australia and New Zealand, which led to the five-day closure of its Auckland casino, multi-million-dollar settlements with regulators on both sides of the Tasman, and an ongoing independent review of its Adelaide casino.
The review has left a threat hanging over the future of SkyCity’s casino licence in Adelaide.
Part of the 73% profit drop was the result of SkyCity’s settlement with Revenue South Australia that ended a dispute over the amount of gaming duty the company should have paid in Australia.
The latest bit of bad news for shareholders came earlier this month when SkyCity announced further delays to the opening of its international conference centre.
The conference centre was nearing completion in October 2019 when a fire broke out covering Auckland’s CBD in a pall of smoke.
It is now not due to open until February next year.
Walbridge hailed the opening of the Auckland Horizon Hotel as a bright point in the first half of the company’s financial year.
Walbridge said the company continued to make significant investments in host responsibility and preventing financial crime.
In Auckland and Adelaide the company was introducing mandatory “carded” play at its casinos to better track individuals’ gambling.
“All customers will need to use a SkyCity card that contains their identity and other important information to play anywhere in our casinos,” he said.
“This will amenable them to know how long they’ve played, how much they’ve spent, and when to take a break.”
He said challenging economic conditions would continue to suppress the amount punters were willing to spend.
As a result, the full-year earnings before interest, tas, depreciation and amortisation would likely fall within a range of $225m to $245m, down from a previously expected range of $245m to $265m.
Although the company’s debts were within its banking covenants, it had a plan to reduce them