In This Article:
Release Date: February 19, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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SkyCity Entertainment Group Ltd (SKYZF) maintained attractive margins at 27%, showcasing business resilience.
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Non-gaming activities contributed close to 30% of overall income, reflecting a strategic balance in revenue streams.
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The company is actively addressing regulatory changes through a multi-year risk transformation program.
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SkyCity is strategically investing in technology, including advancements in AI, to enhance customer experience and operational productivity.
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The opening of the New Zealand International Convention Center in February 2026 is expected to significantly increase visitation and earnings.
Negative Points
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Underlying revenue was down 5% compared to the prior period, primarily due to reduced spend levels at Auckland gaming operations.
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The financial performance was impacted by increased costs from the transformation program in Adelaide.
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The company reported a net profit after tax of only $6 million, affected by interest costs from a casino duty dispute.
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Economic conditions remain challenging, particularly in New Zealand, affecting consumer discretionary spending.
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The company does not expect to pay a dividend for the financial year 2025 due to current earnings outlook.
Q & A Highlights
Q: Can you provide an update on the contingent asset related to costs you're hoping to recover from contractors? A: Peter Fredrickson, CFO: We are confident in the amount, which is supported by invoices and costs incurred due to delays. However, we cannot comment on when we might recover this amount.
Q: Is there a risk that the $60 million B3 cost estimate for Adelaide is too light, and how are you managing costs for the convention center given further delays? A: Jason Walbridge, CEO: We have spent significant time understanding the program and resources needed, and we are confident in our cost estimates. Peter Fredrickson, CFO: The February opening date for the NZICC is only a slight delay, and we don't expect significant revenue loss or increased costs.
Q: How are you approaching asset monetization and capital recycling, especially with the potential need for an online license? A: Jason Walbridge, CEO: We have a five-year plan and are considering which assets to monetize. We are preparing for the online license process, but details on the regulatory framework are still pending.
Q: Can you elaborate on the assumptions around the revenue impact of the mandatory card at play? A: Jason Walbridge, CEO: Our assumptions remain unchanged, and we are confident in our ability to provide a smooth sign-up process. Callum Mallett, COO: We expect the enrollment process to be quick and are pleased with the technology and partnerships in place.