The COVID-19 pandemic, lockdowns, and bans on international travel have hit the annual results of yet another gambling company.
Australia and NZ casino operator SkyCity Entertainment revealed on Thursday that coronavirus lockdowns had hit earnings hard in 2019-20, forcing the company to write down the value of its Adelaide casino.
Gambling rivals, Crown Resorts, Tabcorp, and Star have also reported significant financial damage from the pandemic-driven lockdowns, order closures and none expect a quick rebound, especially with international borders likely to remain shut until mid-2021.
Sky said yesterday that after outbreaks of the virus in Australia and NZ since balance data, it was prepared for the possibility of future lockdowns and few international customers over the next year.
The company said underlying earnings more than halved to $NZ114.2 million ($A105.3 million) in the year to June as forced venue closures and travel bans during the second half weighed heavily, largely driven by a $NZ160 million ($A147.7 million) impairment for its Adelaide casino.
While that figure was in line with guidance issued by the company on August 20, Sky isn’t making any forecasts about the coming year, like so many other companies.
But the directors said the company does expect year-on-year earnings growth in 2020-21.
“Assuming no adverse change to the current Covid-19 outlook in New Zealand and South Australia, expect Group normalised EBITDA to be above FY20 but still well below pre-COVID-19 and FY19 levels,” SkyCity told the ASX
SkyCity’s statutory results were significantly boosted by insurance gains from the New Zealand International Convention Centre fire last October and asset sales. Net impact of the fire was a $NZ269 million ($A248 million) contribution to earnings.
A $NZ66.4 million ($A61 million) profit from the sale of the long term concession of the SkyCity Auckland car park also helped.
But the company did talk positively about its emerging online gambling business.
It thinks the rise in its online gambling customer numbers will continue.
The Malta-based online gambling operations launched a year ago has signed up more than 35,000 new customers and began trading profitably in April.
The company says the fast-growing business is a logical extension of its land-based operations, and while in its infancy, its performance so far has been encouraging.
“The launch … is an important step on the journey of pursuing opportunities to grow and diversify our earnings,” SkyCity said on Thursday.
The company also bought New Zealand’s leading broadcaster and operator of e-sports tournaments, Let’s Play Live Media, in July last year.
Sky shares jumped more than 7% to 42.48 on the ASX, making it the best performer in the ASX 200.
