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Premium gaming bolsters Adelaide Casino's profit

Business

Adelaide Casino owner Skycity Entertainment Group has lifted its first-half net profit by 11.6 per cent to $NZ93.5 million ($A86.8 million).

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The New Zealand-based group, which generates most of its earnings from its Auckland casino but also operates casinos in Adelaide and Darwin, says it had experienced modest growth at its combined NZ properties, stable performance from its combined Australian properties, and a recovery in its international business.

Skycity’s revenue for the six months to December 31 rose by 4.0 per cent to $NZ554.7 million, and the company will pay an interim dividend of 10 NZ cents per share, unchanged from a year ago and unfranked for Australian shareholders.

In Adelaide, growth was smaller but in line with previous guidance from the company, thanks mostly to expanded premium gaming concessions and cost cuts.

Despite disruption from early construction work on an expansion and redevelopment of the Adelaide Casino, revenue (excluding international business) was up 1.3 per cent to A$78.1 million.

“New premium gaming concessions implemented during the period and cost efficiencies have helped to offset the impact of construction disruption from the early works programme,” Skycity said in a statement.

“The premium gaming business continues to build with more visitors to the premium gaming rooms during the period and those rooms being expanded recently to accommodate increased demand during peak trading periods.”

Skycity has begun work on a $330 million expansion of the Adelaide Casino which will include a 30 per cent increase in gaming capacity, a 123-room hotel and new restaurants and bars.

In its statement today, Skycity said the project was progressing well.

“We expect to commence our main works before the end of FY18, with completion and operationalisation of the new facilities expected in early FY21,” it said.

“Walker Corporation’s development of Festival Plaza remains on-track with its 1,500 car parks (of which we have agreement to lease 750 spaces for exclusive use) expected to be completed contemporaneously with our expansion. We remain excited by the medium-term potential for our Adelaide property and its prime location adjacent to key leisure, tourism and entertainment infrastructure throughout the broader Riverbank Precinct.”

– with AAP

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