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SkyCity Shares Rise on Strong Profit Expectations

SkyCity

SkyCity

SKYCITY Entertainment Group Limited NZE: SKC shares rose by more than 3 percent on Tuesday, peaking at $3.83, on the back of promising guidance on its interim first-half results, which are expected to be released on February 13. The casino operator suggests that it will report positive figures from its Auckland-based and international businesses.

The operating earnings of the company are expected to be normal at $189 million, suggesting a 10-year increase over last year’s earnings. The normalized net profit of the company will stay around $97 million, posting a moderate increase from last year’s $90.3 million.

The guidance for the official reported results didn’t seem as encouraging without the adjustments. According to these figures, the operating earnings will be going down from last year’s $180.6 million to only $165 million. The net profit of the company will also go down from $93.5 million to $82 million. The company is focusing on normalized results because it adjusted the ‘win rate’ at its international arm, including casinos in Darwin and Adelaide.

SkyCity is also pegging its full-year results to June 30, which helps it gain a slight advantage over the previous guidance. The operator suggests that second half growth will be much harder to achieve. In 2017, their results were dissatisfactory because of the write-down of its Darwin casino. It happened soon after the city changed its law and allowed more gaming machines in the region.

But the company still has a few exciting developments to look forward to. One of them is its foray into online betting, which was announced last year. SkyCity could partner with an offshore online casino partner to provide these services domestically. The Problem Gambling Foundation expressed their displeasure over the move saying that the Kiwis already have access to Lotto, TAB and other online gambling options.

It is building the New Zealand International Conference Center opposite its Auckland casino. It is expected to open in December this year. It is also planning to launch “state-of-the-art interactive experiences” with the All Black and Weta Workshop in the entertainment area of SkyCity Auckland.