SkyCity Entertainment Group net profit tumbles 60% to $66.2m after 'challenging' year

SkyCity Entertainment Group's net profit fell 60 per cent from $164.6 million last year to $66.2m this year and the company won't pay shareholders a final dividend.

But the result was still at the upper end of the target range the company released when it projected the result in June.

Revenue rose 37 per cent from $822.3m to $1.1b in the year to June 30, 2020.

The company said it had been a "challenging year" due to conference centre fire and Covid-19, with significant operational and financial impacts.

"Group normalised ebitda and NPAT were negatively affected but at top end of guidance range provided at time of equity raising," it said.

SkyCity CEO Graeme Stephens. Photo / Jason Oxenham

SkyCity said it had a strong balance sheet and was "able to withstand further downside shocks and/or Covid-19 disruptions".

Its big Adelaide expansion is on-track, and expected to open this year.

Auckland's conference centre and Horizon Hotel reinstatement is progressing satisfactorily.

The company's online casino business has grown rapidly despite operational constraints. It has more than 35,000 customer registrations.

Graeme Stephens, chief executive, said the 2020 financial year had been complex and challenging for SkyCity.

"A wide range of strategic decisions and actions have had to be taken to mitigate the impacts of, first, the fire and then the impacts of Covid-19. We have rapidly restructured our New Zealand workforce, downsizing it by around 25 per cent to ensure SkyCity is positioned to be sustainable in the short to medium term; we have undertaken a capital raising and debt restructure to ensure that SkyCity has sufficient liquidity and funding capacity; and significant operational effort has been focused on closing and reopening our properties with rigorous health and safety measures in place," he said.

"SkyCity was able to move quickly but with care in response to these events and is well positioned to deal with the foreseeable future. The wage subsidy in New Zealand and Australian JobKeeper scheme have been helpful and partially mitigated the impact of property closures and ongoing negligible international customer activity.

"Our domestic businesses in New Zealand and Adelaide have recovered more quickly than anticipated post reopening which has been encouraging, although the outlook remains unpredictable as we adjust to new social and economic settings," he said.

"The other aspects of our business that are more reliant on international visitors, including VIP gaming, hotels and restaurants, can only fully recover when country borders reopen. Our International Business activities should recover once travel restrictions are lifted, but the parts of our business driven by corporate travel and by tourism, such as our hotels and the Sky Tower will take longer.

"SkyCity's strategic plan is focused on managing the post-Covid-19 recovery and completing its major projects in Adelaide and Auckland, which will underpin medium-term earnings and cash flow growth," he said.