SkyCity has issued a warning about revenue for the fiscal year 25 as market conditions "deteriorate."
After the first half of the year, SkyCity has lowered its guidance for the full-year group EBITDA.
SkyCity Entertainment Group has issued a warning that the group's earnings before interest, taxes, depreciation, and amortisation (EBITDA) for the full year of 2025 is likely to fall below the lower end of its updated forecast range due to the fact that circumstances in the market continued to "deteriorate."
SkyCity stated in a financial report that was posted on Tuesday that the group's EBITDA might fall by about 4% below the bottom end of the full-year target, which is between NZ$225 million (US$124 million) and $245 million.
In February, when the operator published its H1 data, it stated that this was the result of losses in revenue, underlying EBITDA, and net profit that occurred during the first half of the company's fiscal year.
What factors will cause SkyCity to fall short of its full-year goals?
SkyCity said that the amount of money spent each visit across all of its venues continued to decrease, despite the fact that challenging market conditions persisted during the second half. This, according to the study, made forecasting a challenging endeavour.
During the first half of the year, SkyCity's Auckland location experienced a decrease in the average amount spent each visit across both the hospitality and gaming departments. However, the performance of casinos in Hamilton and Queenstown has been, for the most part, in line with what was anticipated.
With a particular emphasis on Adelaide, SkyCity reports that performance has suffered as a result of decreased visits and spending by VIP clients. This is attributed to an improvement in the anti-money laundering and gambling damage minimisation program that the organisation has in place.
On the other hand, the overall turnover of electronic gaming machine terminals in South Australia increased from one year to the next. According to SkyCity, an uplift program was still being carried out at the Adelaide area site. It is anticipated that 60 million dollars will be spent on this endeavour between the fiscal years 25 and 27.
circumstances that are challenging and have a "significant" impact
During the briefing, CEO Jason Walbridge stated that although he was pleased with the overall visitation across all SkyCity assets, "difficult" market conditions continued to have an impact on SkyCity.
"The challenging market conditions that businesses like ours, which are dependent on discretionary consumer spending, are experiencing continue to have a significant impact on both our revenue and earnings," Walbridge said. "Our revenue and earnings are continuing to be negatively impacted."
"The levels of visitation that we are seeing across all of our precincts continue to delight us," the police department said. It is in response to the reduced revenue levels that we are presently experiencing that we are making adjustments to our underlying cost base when it is acceptable to do so.
Despite this, Walbridge maintained a positive outlook over the longer term. Among the most important highlights, he mentioned the New Zealand International Convention Centre (NZICC) opening that is slated to take place the following year.
"Despite these difficult circumstances, we continue to have optimism that as consumer confidence begins to return and spending begins to increase, SkyCity is in a good position to make the most of the opportunities that are in front of us," he said when asked about the situation. This involves the opening of the New Zealand International Convention Centre in February of 2026.
Is there a future for SkyCity on the internet?
SkyCity is also notable for its presence in the online gambling industry. Despite the fact that Walbridge did not mention it in the update, the group did mention that it was getting ready to operate a regulated online casino in New Zealand. By the year 2026, this is expected to be completed, and SkyCity is already collaborating with the government to develop regulations for the market.
SkyCity was reportedly one of the few grey market companies who were interested in seeking for an iGaming licence, according to documents that were submitted to the Cabinet in September of 2024.
Additionally, the following entities were included on the list of interest parties: Tab NZ, Grand Casino Dunedin, Christchurch Casino, Class 4 societies, 888, Bet365, SpinBet, Spin City, and Super Group (which includes Betway).
