SkyCity Entertainment Group (SKC) H2 2024 earnings summary

Executive summary

• Underlying EBITDA was NZD 277.8 million, down 8% year-over-year, with reported NPAT a loss of NZD 143 million due to significant accounting items, impairments, and regulatory penalties.

• FY24 group revenue was flat year-over-year, with reported revenue at $928.5m and underlying revenue at $959.6m, both up 0.3% YoY.

• No final dividend declared for FY24; interim dividend of NZD 0.0525 per share was paid.

• Major transformation and compliance uplift programs are underway, with significant investment in risk, compliance, and people.

• Key projects include the Auckland car park buyback, Horizon hotel opening, and NZICC set to open in 2025.

Financial highlights

• Underlying EBITDA: NZD 277.8 million, down 8% year-over-year; reported EBITDA: $138.2m, down 16.7% YoY.

• Underlying NPAT: NZD 123.2 million; reported NPAT: loss of NZD 143 million due to impairments and tax changes.

• Group expenses increased 5% year-over-year, with people costs up 4.5% and risk/compliance costs up NZD 2 million to NZD 22 million.

• Net debt was $663m with a leverage ratio of 2.3x.

• EGM revenue contributed 47% of total revenue, down from 50% last year.

Outlook and guidance

• FY25 underlying group EBITDA guidance: NZD 245–265 million; no dividend expected for FY25.

• $20m–$30m of FY25 costs allocated to risk/compliance uplift, Adelaide regulatory costs, Horizon hotel, and NZICC pre-opening.

• CapEx guidance includes NZICC completion, BAU expenditure, and core capex for FY25 expected at $60–$70m.

• Mandatory carded play to be implemented in NZ by July 2025 and in Adelaide by early 2026, with an estimated 15–20% impact on uncarded gaming revenue.

• Positive medium-term outlook with potential uplift from new projects and regulatory clarity.