SkyCity cuts profit forecast, warns of casino closures
Tuesday 17th March 2020
Gaming company SkyCity Entertainment has nearly halved its forecast full year profit because of the Covid-19 virus and says it might be forced to shut all its casinos.
The company said it now expects an annual normalised profit of between $80 million and $100 million compared with last year's $173m.
Chief executive Graeme Stephens said there has been a noticeable drop in customers at its flagship Auckland casino and associated hotel, in particular a slide in wealthy Asian gamblers who play the casino's high stakes tables, but are hit by virus entry restrictions.
He said the ban on mass gatherings and the need for social distancing would hurt, but could be worked around.
"Casinos are similar to shopping centres in that they have multiple smaller areas within a larger precinct, and these areas can be used in flexible ways to comply with enhanced mass gathering restrictions," Stephens said.
However, he said a lockdown on movements in New Zealand and Australia would lead to a complete closure of all SkyCity sites.
The two small Queenstown and Hamilton casinos have also taken a hit, and business is also down for its large Adelaide casino, and there had been a rise in the numbers signing up to its offshore-based online-casino.
Stephens said Sky is cutting all non-essential spending, and asking staff to take voluntary leave, but was financially secure with undrawn bank facilities of $337m, and an expected $85m insurance payment for the International Convention Centre fire due soon.