Auckland casino operator SkyCity has downgraded its projected profit and halted dividend payments because of challenging economic conditions, extra-construction costs and regulatory fines.
The Sky City Entertainment Group has told the NZX it now expects earnings to drop by $10 million and net profit after tax (NPAT) to decrease by $5 million. The previous profit range of $125 to $135 million is now forecast to be $120 to $125 million.
"Current trading conditions continue to reflect a challenging economic environment, particularly in Auckland. SkyCity expects this to continue throughout FY25."
The downgrade is also due to the $67 million penalty imposed by Australian financial regulator AUSTRAC and another $76 million needed to complete the International Convention Centre in Auckland.
Financial performance has also been affected by the delayed opening of the new Horizon Hotel in Auckland which is connected to the Convention Centre. SkyCity now expects the hotel to open in August 2024.
As a result, shareholder dividends have been suspended for the second half of 2024 and all of the 2025 financial year.
SkyCity says this is to maintain a 'robust level of headroom" to keep the company's net debt within the terms of its financial agreements.
