SkyCity concerned about potential closures and job losses

Wednesday 18th of March 2020

Chief Executive Graeme Stephens told a New Zealand media outlet that in the event the government declared a total lockdown resulting in casino closures, that he could not rule out job losses among the firm’s more than 5,000 staff.

“We note that in other countries where total lockdowns have taken place, everything closes, so we have to contemplate that. We are not living in that world… right now, but I think all of us have to plan for the possibility of a total lockdown.”

Visitation to SkyCity’s Auckland precinct is down 15 percent for March, and revenue from domestic table and automated table game revenue is down 43 percent with electronic gaming machine revenue down 14 percent the company has told the New Zealand Stock Exchange.

Revenue to the Auckland hotels is down 15 percent, although occupancy is still good at 79 percent.

In its other resorts, SkyCity reports non-gaming revenue in Hamilton is down 12 percent but there has been no impact on gaming revenue.

In Queenstown, the revenue from its two casinos is down 37 percent and in Adelaide Gaming revenue is down 7 percent, and non-gaming revenue down 14 percent.

Stephens said there had been a substantial decline in international business activity with Asian customers not able to travel to New Zealand and Australia, but the company statement gave no details. He is expecting further declines ahead: “While there have been no instances of transmission within communities in New Zealand to date, it is reasonable to assume that this will occur which will have an impact on visitation to our precincts.”

Assuming all its properties remain open for business, the company is now forecasting “an EBITDA impact of around $55m in relation to previous guidance for the full year. As a result of these impacts, SkyCity now expects normalized EBITDA for FY20 to be in the range $230-250 million and normalized NPAT for FY20 to be in the range $85-100 million.”

In connection with Covid-19 countermeasures, SkyCity is shutting down tables and increasing cleaning routines as it battles the impact of the coronavirus.

The number of people allowed at each table in the casino is also being reduced to five and some machines being turned off to maintain some social distance.

Stephens said, “our business is similar to a shopping center in that we have a number of smaller venues within a larger precinct.” He said the company could control how many people were at each venue.

Cleaning was also being ramped up and there would be more hand sanitizers available for guests and staff. Anyone showing flu-like symptoms would be removed from the premises to protect staff and customer safety.