SkyCity Entertainment Posts Loss Following Slower Traffic
Posted on: February 14, 2022, 09:56h.
Last updated on: April 14, 2022, 09:16h.
SkyCity Entertainment Group had difficulty getting started in its current fiscal year. The New Zealand-based casino operator reported a significant loss in profit for the first half of the period.
When COVID-19 was giving the rest of the world a thrashing in 2020, New Zealand managed to stay relatively healthy.
That allowed SkyCity to keep its operations going, reporting a profit of NZ$77.9 million (US$51.53 million) for the last six months of the year. What a difference a year makes.
SkyCity Profit Plummets in 2021
From July through December of 2021, SkyCity took a major hit to its bottom line. The company saw a loss of NZ$33.7 million (US$22.3 million) during the period. This coincides with the first six months of its fiscal year.
The weak performance follows an overall drop in revenue. Across the half, SkyCity lost 36%, with final revenue closing at NZ$289.8 million (US$181.79 million).
The operator puts the decline squarely on the results of COVID-19 restrictions. On July 22, 2021, there were 20 new cases. Two weeks later, there were 84. Fast-forward to November 17, and the number had jumped to 167. For the first six months of the year, there were almost no cases, except for an occasional single-day blip. As of February 13, there were 1,796 new cases.
SkyCity Auckland the Biggest Loser
The biggest drop in revenue can be found at SkyCity Auckland, the company’s flagship casino. Its year-on-year revenue drop was 49% after it recorded NZ$118.5 million (US$78.42 million) for half.
Operating earnings lost 83%, dropping to NZ$16 million (US$10.58 million). This was the result of the property being shut down for about three and a half months because of COVID-19. During the first half of the fiscal year, it closed its doors for 19 days.
Because of the weaker performance, SkyCity saw an increase in its debt. The company reports that its debt is now NZ$685 million (US$453.4 million), NZ$95 million (US$62.88 million) more than in the previous period.
As a result of the financial void leading to its losses, SkyCity has given its shareholders some bad news. They can’t expect dividends this time around, as the company had to come to an agreement with its lenders.
Still, it isn’t all bad news for the company. It currently has around NZ$258 million (US $170.74 million) in liquidity. This, it asserts, will facilitate the company’s efforts to meet upcoming challenges and continue developing its strategic plans.
The results haven’t made investors happy. Trading on the New Zealand Stock Exchange, SkyCity was trading at NZ$3.11 ($2.06) on February 9. In light of the recent financial update, the stock price dropped to NZ$2.87 (US$1.90) this morning. A slight correction has been seen during the day, with a little improvement to NZ$2.90 (US$1.92) by 5 PM local time.