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SkyCity first-half earnings up 18 per cent

NZ Newswire logoNZ Newswire 8/02/2017 Tina Morrison

SkyCity Entertainment Group, New Zealand's only listed casino company, has posted an 18 per cent lift in first-half profit as improved trading at its key Auckland casino offset a weaker performance from its Australian and high-roller businesses.

Net profit rose to $83.8 million in the six months ended December 31, from $71m a year earlier, the Auckland-based company said on Thursday.

The year-earlier earnings included a $2.8m write-down of its Hamilton hotel project costs and $7.6m write-off of its Auckland property to make way for a convention centre.

In the latest period, revenue slid 5.8 per cent to $533.1m.

SkyCity, which has four casinos in New Zealand and two in Australia, posted a 5.1 per cent gain in earnings before interest, tax and depreciation and amortisation at its Auckland casino.

However, its Australian business, which includes casinos in Darwin and Adelaide, reported a 9.5 per cent earnings drop.

Its international business, the term it uses for "high roller" gamblers, was hurt by Chinese restrictions on funds transfers and reduced visits by big-spending customers, with earnings down by more than two-thirds.

The main drivers of the first-half performance were solid growth in the combined New Zealand properties, offset by reduced turnover in the international business, continued competitive and economic pressures in Darwin and a weaker Australian dollar, the company said.

SkyCity Auckland, which accounted for approximately 80 percent of group ebitda in the interim period, was expected to continue to deliver modest second half growth.

However, SkyCity said challenging trading conditions would persist in Darwin during the second half due to a soft local economy and increased gaming machine numbers in pubs and clubs, while Adelaide would likely remain stable.

The company will pay a first-half dividend of 10 cents a share on March 17, down from 10.5 cents a year earlier.

The shares last traded at $3.74, and have slid 4.8 per cent so far this year

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