SkyCity Adelaide’s gaming floor busy again after COVID-19 revenue hit
SkyCity Adelaide’s gaming activity is now back to pre-COVID-19 levels, beating expectations, but the update comes as the venue revealed the full impact of the virus hit to its earnings.
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Local gaming activity at SA’s sole casino, Adelaide SkyCity, has picked up more than expected, and is now at pre-COVID-19 levels, its NZ parent said, while revealing the extent of COVID-19’s impact on its earnings.
SkyCity Entertainment Group told investors the Adelaide casino’s revenues fell 19 per cent to $121m for the full year to the end of June, which included more than three months of closure.
Earnings before interest tax, deductions and amortisation were down a substantial 46 per cent to $11.2m.
As reported last month, the earnings windfall from SkyCity Adelaide’s $330m expansion will take longer to come, leading to a slashing of the value of the Adelaide casino licence by half.
The group said its $330m expansion in SA, including the construction of the new Eos by SkyCity hotel was on track, with about $80m of capital expenditure still remaining on the project.
A number of new restaurants and a brewery are set to open on site in a staged manner from November this year, with about 700 staff currently being hired in SA.
The hotel will start taking bookings from December 2020.
The group also said it expected an handover of its car parks from developer Walker Corporation in the first half of next year.
Following the SA Government’s regulatory review, the casino will also target implementation of “new reforms”, including note acceptors and Ticket-in Ticket-out (TITO) technology on the main gaming floor from next month.
“Clearly it’s been a tough year for us here in Adelaide,” SkyCity Adelaide general manager David Christian said.
“However we are fortunate that construction kept going through the COVID-19 shut down period so we are on track to have the existing casino completely refurbished by October in time to join up to the magnificent new hotel and expanded entertainment expansion creating one of Australia’s top integrated casino venues.
“We are extremely optimistic about our future with a strong local market and once tourism in South Australia resumes,” Mr Christian said.
The NZ-based group’s chief executive Graeme Stephens said the full year result “is complicated” due to a massive fire in October 2019 at its under-construction $700m convention centre and hotel project and COVID-19 related issues.
“Our domestic businesses have recovered more quickly than anticipated when open, and if we can sustain this, the business is not under threat and can wait it out until the world recovers,” Mr Stephens said.
Reported results were boosted by insurance payments related to the fire and sale of a NZ asset, but partially offset by an A$150m impairment of the Adelaide casino licence.
Normalised revenue though was down 24 per cent to $NZ706.7m while normalised profit after tax fell 60 per cent to $NZ66.3m.