Sky city convention centre - A Troubled project. Video / Nathan Meek
SkyCity Entertainment Group's "challenging" year meant the dice rolled against chief executive Graeme Stephens, whose pay tumbled 38 per cent from $3.9 million to $2.4m.
But he's not complaining about lady luck and his $1.5m pay cut, saying part of what he would have got without Covid-19 went to theSkyCity Employee Hardship Fund which now stands at around $1m.
"This thing has affected everyone negatively and I'm no exception to that and I don't expect to be. We had big salary sacrifices in the last quarter of 2020 financial year. The good news is the money we are sacrificing we put towards the hardship fund which is helping out others of our staff negatively impacted," Stephens said this morning.
SkyCity had paid $209,142 to staff, with no obligation for repayment by August this year. That went to 95 employees in need of financial assistance, the annual report said.
Stephens' 38 per cent pay cut follows Fletcher Building chief executive Ross Taylor's 25 per cent reduction, from $5.2m to $3.9m.
Taylor anticipates completing six weeks in isolation from mid-2020 and early next year because of his travels between New Zealand and Australia. His first lag was in Rotorua's ibis hotel where he marked each day off with a red X on a wall calendar.
But Stephens said today he planned to spend no time in isolation and had decided he simply would not get on a plane to go overseas, no matter how much he wants to.
"I can't travel. I would love to go to Adelaide and it's the most exciting thing to happen in Australia in my time at SkyCity. I know every aspect of that building - colour on the walls, carpet," he said indicating staff in Auckland were using a virtual reality programme to see inside the construction site across the Tasman.
SkyCity today described 2020 as "challenging" and reported normalised net profit after tax down 60 per cent from $164.6m to $66.3m, although that was at the top end of the range flagged a few weeks ago.
Its $750m fire-damaged NZ International Convention Centre is estimated to cost $336m to repair, a "more refined" estimated than was made originally, Stephens said; $105m has already been paid out in insurance.
"It's insured," Stephens said indicating all $336m was covered.
Graeme Stephens' pay was cut from $3.9m to $2.4m. Photo / Jason Oxenham
The NZICC is now due to be completed in 2023 but the company struck a new arrangement with the Government for a final "long stop" date of January 2025.
"The 2025 date is the date by which we have to be complete but we're very focused on getting it open as soon as possible and we hope to be well within that. We expect to open it during 2023," Stephens said today.
Asked about the convention centre market, he said: "It's too early to tell what will happen with conventions. [Completion in] 2023 will enable us to book with confidence from 2024 and there's a belief that by then the world will have returned to some degree of normalcy. There's aways going to be demand for physical interaction and conferences. New Zealand has dealt with the pandemic in a very positive way."
Firefighters tackle the blaze at SkyCity last October. Photo / Supplied
But shareholders get no final dividend for the 2020 year and nor does the company expect to pay out the first half-year dividend of this current June 30, 2021 financial year. But Stephens said "we do anticipate being able to return to dividends" for the final payout of the 2021 financial year.
A few weeks ago, SkyCity raised $230m new equity by issuing shares, raised $160m extra debt and renegotiated existing debt with its funders "so we don't have any problems at June, December or June 2021 and there's enough of a buffer". A condition of that was not paying the final 10cps dividend to shareholders.
"The capital raising ... ensures that our major construction projects remain fully funded and that we are also able to continue with smaller projects that will enhance operations," SkyCity's annual report stated.
"We now have 'buffer' facilities of liquidity available to draw down should the Covid-19 situation worsen, but at present this is not required."
The shares traded up 8 per cent at $2.70, from Monday's $2.44.
