Casino operator SkyCity has suspended dividend payments after updating guidance for FY24 and now expects profits to slump between $10 million and $25 million with EBITDA coming in between $280 million to $285 million and net profit at $120 million to $125 million.
This compares to previous EBITDA guidance of between NZ$290 million and NZ$310 million and NPAT of NZ$125 million and N$135 million.
SkyCity cited a challenging economic environment impacting casino spend and a delay in the opening of the Horizon Hotel in Auckland to August 2024 as reasons for the downgrades.
In addition, SkyCity has to pay $67 million in fines for breaching money laundering and anti-terrorism laws at its Adelaide casino.
SkyCity said tough trading conditions continue to reflect a challenging economic environment, particularly in Auckland. SkyCity expects this to continue throughout FY25.
In addition, SkyCity expects to be impacted by a number of one-off items, including pre-opening operational costs for the New Zealand International Convention Centre (NZICC), preparing for online gaming regulation in New Zealand and the ongoing risk and compliance uplift activities at SkyCity Adelaide.
The one-off costs were estimated to be between $20 million to $30 million.
SkyCity said it is committed to capex of $76 million to complete the NZICC.
Subject to satisfactory trading and market conditions, the board said it expects to resume dividend payments in FY26.
Sky were down 2% trading at $1.60.