NZ's SkyCity Entertainment looks to SE Asia for revenue growth

New Zealand-based SkyCity Entertainment Group plans to focus on Southeast Asia to boost revenue growth, after reporting a 55 percent surge in business from the region in the first quarter.
At its annual meeting in Auckland, the country’s only listed-casino operator reported good growth across core businesses, buoyed by robust growth in Auckland and strong momentum, especially in the second half of financial year 2014.
International business turnover grew strongly, "exceeding" NZ$6 billion (US$4.76 billion.)
But costs of redeveloping the Adelaide casino and the continued "significant appreciation" of the New Zealand dollar over the financial year (to June 30) led to a 4.3 percent fall in net profit to NZ$287.6 million.
But the outlook was favorable. Overall, first quarter revenues were up 6 percent over the previous financial year, despite disruptions to the Adelaide property.
"We expect disruption to continue in Adelaide for the remainder of first half of 2015 while we complete the redevelopment and then look forward to growth in the second half of 2015," says chief executive Nigel Morrison.
SkyCity Entertainment hopes to boost its share of the Australasian market for high-rollers from 5 to 8 percent to 15 percent following the Adelaide Casino redevelopment.
But the Auckland casino was key in overall revenue in the first quarter, up 12.4 percent with international business rising 4.1 percent to NZ$1.39 billion.
Auckland grabbed the lion's share of international business at 64 percent, followed by Adelaide at 18 percent and Darwin at 16 percent.
Overall first quarter mass gaming (machines and local tables) revenue was up 5.4 percent.
The casino operator witnessed "good growth" from Chinese players, a "core target VIP market", with turnover from Chinese domiciled players up more than 400 percent on the previous period last year.
Overall, SkyCity Entertainment reported a 55 percent increase in international business to NZ$2.2 billion.
Morrison said the planned NZ$350 million to $380 million capital expenditure on the new six-star hotel together with additional gaming facilities and VIP rooms in Adelaide should enable the international growth to equal Auckland's.
Over the past four years international VIP table game return has risen from NZ$15 million to NZ$90 to NZ$100 million currently.
The win rate from international business for the first quarter was 1.72 percent compared to 1.45 percent in the same quarter last year. Morrison said the international business was returning a margin of between 15 and 20 percent net profit.