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SkyCity half-year results impacted by fire, carpark sale

The half-year profit for New Zealand’s listed casino and hotel operator SkyCity Entertainment has dropped nearly fifteen percent on lower revenue and the impact of the fire in its partly constructed international convention center last October.

SkyCity Entertainment has recorded a nearly three hundred percent increase in reported net profit to NZ$328 million (US$213 million) which equates to a normalized net profit of just NZ$75 million ($49 million) down 16.4 percent for the half-year to December.

SkyCity is reporting normalized revenue for the six months to 31 December of NZ$491 million, down 7.9 percent, normalized NPAT of NZ$75 million, down 16.4 percent compared to the previous comparable period.  

Earnings per share were down from 13.3cps to 11.3cps, a drop of 15 percent.

A fully imputed dividend of ten cents per share will be paid, the same as last year and in line with company forecasts.

The company said in a statement to the NZX that the results had been significantly impacted by the fire at the International Convention Centre in October and by the transaction involving the sale of the company’s carparks.

The negative impact on revenue from the fire is given as $240.6 million and from the sale of the carparks at $66.5 million. This is the first time these figures have been disclosed.

Notes to the financial accounts state that the insurers have confirmed the company’s contract works policy “will respond in relation to damage to the (convention center and associated hotel)’, but noted that “no reconstruction cost or damage estimates are currently available from the contractor or insurer.”

An independent advisor has been engaged to assess these which are provisionally estimated at between $NZ220 million to NZ$250 million with damage to the new hotel which is part of the centre valued at another $6 million.

The note says that the SkyCity group has assumed an insurance recovery for both buildings of $226 million, and recovery is stated to be “virtually certain.”

Shares in the company are trading at $3.69 up 10 cents from yesterday’s close and up 14 cents from a low of $3.55 earlier in February.

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