Result preview: Focus on convention centre as investors contemplate SkyCity result

Convention centre update due tomorrow. Photo/supplied

NZX-listed SkyCity Entertainment Group will tomorrow release its half-yearly result and give an update on progress on the troubled $700 million-plus NZ International Convention Centre in Auckland.

Results for the half-year period to December 31, 2018, are due around 8.30am.

SkyCity, with a market capitalisation of $2.6b, is trading around $3.96, ahead of $3.44 in December but still below its $4.45 in early 2017.

"The market has a June 2019 consensus revenue forecast of $1.075b, a consensus earnings before interest tax depreciation and amortisation forecast of $352.8m and a consensus net adjusted profit after tax of $169.6m," market analysis said.

"Investors will be looking at New Zealand trading to see whether a slowing economy is impacting on international and domestic visitation, how Adelaide is progressing and whether the company looks to make acquisitions," that commentary said.

Progress on the NZICC will be another area of interest, with the completion of the roof on the giant building by Fletcher Construction expected soon.

Glazing is on the new five-star hotel which has risen behind TVNZ near the Hobson St/Victoria St corner and a number of tower cranes are swinging on the site.

Chief executive Graeme Stephens will provide commentary and has made himself available for media interviews.

The troubled convention centre was initially scheduled to open this month, but is not now likely to be completed this calendar year. SkyCity announced last year that it expects further delays at its "challenging" centre project and still has no date for its opening, although a number of conferences have already been booked.

The casino operator says the centre and Horizon Hotel, originally budgeted at $703 million and expected to be completed in February 2019, will now be completed "beyond December 2019".

SkyCity has not provided any new timeline and said last year it would provide further updates once it has greater certainty about completion dates.

Fletcher Construction, managing the project, last year wrote $486m off the value of a string of developments, including the conference centre. As well as rapidly escalating costs, former chair Ralph Norris particularly cited contract terms for the conference centre, which allowed too much flexibility for variations to be undertaken at Fletcher's cost.

Fletcher won the right to build after a deal struck between SkyCity and the previous Government, which critics said lacked a competitive tender.

In late January, SkyCity announced it "had a strong finish to the half-year period to 31 December 2018 and expects to report better-than-expected growth in normalised earnings for the period. This growth is primarily due to a favourable performance in Auckland and strong growth in the international business."

Normalised EBITDA in 1H19 will be around $189m, up around 10 per cent on 1H18 and normalised NPAT in 1H19 will be around $97 million, up around 11 per cent, the business said.

"The expected reported results for 1H19 differ from the expected normalised results primarily due an adjustment for the actual win rate in the international business. The actual win rate was 0.98 per cent in 1H19, which was below the theoretical win rate of 1.35 per cent, and compares to an actual win rate of 1.70 per cent in 1H18. Reported EBITDA in 1H19 is expected to be around $165 million and reported NPAT in 1H19 is expected to be around $82m," the company announced on January 29 this year.