“However, should this status change and the construction site shut down, then the budgeted capital expenditure will cease as well as several related work streams that are required to complete those projects,” the company said in a statement issued in Wellington this morning.
SkyCity runs casinos, hotels, restaurants, bars and attractions are closed across five sites, four in New Zealand and one in Adelaide.
This morning it announced 200 New Zealand redundancies and says it has stood down 90 per cent of its Australian workforce but no decisions have yet been made about potential Adelaide redundancies.
“We welcome the Australian Government’s new JobKeeper payment scheme and expect to access this scheme for all our Australian staff,” the statement said.
“We still expect to complete the new Adelaide expansion in the reasonably near term and reopen (still on track for later this year) as a significant employer.”
SkyCity will also cut ‘stay-in-business’ capital expenditure by $15 million for the remainder of the financial year with the remaining capital expenditure relating solely to essential ICT projects that can be continued remotely and to Adelaide master plan projects.
All 50 of SkyCity’s capital development projects in New Zealand except its NZICC and Horizon Hotel project have been put “on hold” at least until the properties reopen. No work is currently possible on the NZICC and Horizon Hotel project in Auckland because of a local shutdown.
The statement said the company’s objective was to right-size and refocus the business now so that it is sustainable through the crisis.
“During the closure, we face almost $90 million in lost revenue per month whilst still incurring significant costs such as utilities, lease payments and labour, with labour costs alone around $20 million per month.
“When we reopen, our business will already be tailored to the market we are operating in, and we expect it to grow again as our economy recovers.
“This is a storm we could, and would, weather if we were to reopen within a few months in a pre COVID-19 world.
“Unfortunately, the impact of COVID-19 is not limited to the short- term consequences of closure.
“Even when we fully open, we reasonably expect that weaker economies, lower personal disposable income and changed entertainment habits, as well as longer term travel restrictions, will result in us recommencing as a smaller, domestically focused business.
“We all believe that the virus will ultimately pass and that we can then start to return to “normality”. None of us, however, know what “normal” will look like, or when it will happen – but it is reasonable to assume that it will take some time.
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