As expected, Kiwi casino group SkyCity (ASX:SKC) has reported a significant loss for the 2024 financial year, following a series of one-off charges related to the value of its businesses in Adelaide and Auckland.
The NZ$143.3 million net loss capped a year filled with challenges for the company, which have continued into early 2024-25 with a regulatory finding against its Auckland casino.
The company announced on Thursday that its underlying net profit after tax also declined by 7.2% to NZ$123.2 million.
However, SkyCity reported a slight increase of 0.3% in both reported and underlying revenue for the 2023-24 financial year, reaching NZ$959.6 million.
New CEO Jason Walbridge stated in the announcement that the year to June was "a very challenging financial year."
He attributed the challenges to a soft economy, rising costs of living in both New Zealand and Australia, and various regulatory matters.
The company had previously disclosed the one-off items: an AU$86.2 million impairment on the SkyCity Adelaide casino and a NZ$129.6 million tax adjustment following changes in New Zealand tax laws.
In June, the company suspended dividend payments until 2026 and extended its debt through a restructuring.
Mr. Walbridge assumed the role of CEO last month, succeeding Michael Ahearne.
Net debt increased from NZ$444 million in FY23 to NZ$663 million due to the repurchase of the Auckland car park concession and core capital expenditure of NZ$64 million during the year.
The company reaffirmed its FY25 earnings guidance of underlying group EBITDA between NZ$245 million and NZ$265 million and confirmed no dividend.
SkyCity is currently undertaking a major transformation program to mitigate risks and improve compliance with regulatory requirements.
This follows a recent agreement with the Department of Internal Affairs to close the Auckland casino for a week in September due to breaches of its host responsibility program.
An investigation found that a gambler at the Auckland casino spent over nine hours continuously playing poker machines without any interaction with staff and played uninterrupted for several hours on 23 occasions.
As a result, the Auckland casino will be closed from Monday, September 9 to Friday, September 13, although associated restaurants and tourist attractions will remain open.
The company is also preparing for the opening of the New Zealand International Convention Centre, a project that has faced significant challenges for both SkyCity and the contractor, Fletcher Building.
Additionally, the regulation of online casino gambling in New Zealand is forthcoming.
