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SkyCity’s half year results will show mixed success

SkyCity Entertainment Group’s half year results to be released on Wednesday will show a better performance in the New Zealand market, but that its Australian operations will drag the company down, analysts say.

Wednesday’s result will be a mix of good and bad news with evidence that Auckland is returning to sustainable growth, Adrian Allbon of Craig’s Investment Partners and Mark Wilson of Deutsche Bank, said in a preview.

 “Our estimate is Auckland Ebitda up 8 per cent to $117 million, ($86 million),”said Adrian Allbon of Craig’s Investment Partners and Mark Wilson of Deutsche Bank.

“[Adelaide] is likely to disappoint again based on our estimate for its Ebitda to be down 21 per cent year on year to A$15 million, ($11.6 million)” primarily due to a soft macro environment.

Analysts at UBS said SkyCity’s Auckland hotels have performed impressively amid high hotel occupancy in the country.

"The New Zealand hotel occupancy rate at 78 per cent in 2014 is the highest level in 10 years," USB said.

The Bloomberg consensus of analysts' forecasts the company’s net profit after tax will be $98 million in 2015, rising to $108 million by next year and $115 million in 2017.

Last week both Deutsche Bank and Craig’s Investment partners downgraded the company’s share rating from hold to sell ahead of Wednesday’s results, while UBS’s view was neutral.


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