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$23 million JobKeeper payments keep SkyCity casino in black

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Adelaide’s SkyCity Casino has received more than $23 million in JobKeeper payments, helping its New Zealand parent company to a $73.1 million profit for the first half of the 2021 financial year.

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The Kiwi company reported its H1 FY21 results to the Australian Securities Exchange this morning, revealing a 37 per cent fall in revenue for the period to $420 million ($NZD 449.9 million)and a 76 per cent drop in net profit after tax to $73.1 million, down from $306 million in the last six months of 2019.

However, revenue from Adelaide was $89.5 million in the six months to December 31, a 15.8 per cent increase on the $77.4 million it generated in the same period the previous year.

This amount included $15.4 million in JobKeeper payments from the Australian Government on top of the $7.8 million it received from March 31 to June 30 last year. SkyCity was eligible for the payments until January 3 this year.

The company has also received almost $30 million in wage subsidies from the New Zealand government to help prop up its casinos in Auckland, Christchurch, Hamilton and Queenstown.

The Adelaide casino also outperformed its New Zealand counterparts when it came to Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA), reporting a 95.9 per cent increase to $25.2 million for the six months compared with $12.9 million for the first half of the 2020 financial year.

SkyCity opened its $330 million Adelaide expansion in the first week of December. The expansion includes new gaming spaces, bars, restaurants and the luxury 120-room EoS hotel.

In its report to the ASX this morning, the company said the casino had seen a gaming revenue increase of 33 per cent for the period December 1 to February 13, hotel occupancy had been about 60 per cent and the new food and beverage facilities were proving popular with customers.

Commenting on the overall results, Sky City CEO Michael Ahearne said the company had been significantly impacted by COVID-19 disruptions, which had delivered a “mixed financial performance given the challenging operating environment”.

“Our local gaming performance has demonstrated resilience in the first half whilst our tourism-related businesses including hotels, food and beverage and international business, have been significantly impacted,” he said.

“Adelaide’s performance prior to expansion opening was impacted by COVID-19 disruption with performance since opening the new facilities significantly improved across all activities.

“Turning to the outlook for FY21, we will continue to focus on navigating through the uncertainty presented by COVID-19 (including Alert Level 3 settings in Auckland this week) whilst delivering our medium-term strategic plan including leveraging our new assets such as the Adelaide expansion and Auckland VIP gaming facilities.”

SkyCity’s ASX share price was $2.62 at today’s opening, down 25 per cent on its price of $3.52 on February 19 last year.

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