SkyCity VIP gambling levels drop
SkyCity’s "high worth" VIP customers have been taking fewer trips to the casino and the arrest of billionaire gaming mogul James Packer’s workers in China could hurt spending further still.
But the casino company was confident it would continue to grow after a "slightly disappointing" start to the year following successive years of record profits.
SkyCity made an after tax profit of $145.7 million for the year to June 30 as VIP high-rollers gambled at record levels.
The company’s international business - what it calls its international VIPs - had a record year and it opened three new "Grand Horizon" salons in Auckland, where you could place bets worth as much as $300,000 a hand.
But SkyCity interim chief executive John Mortensen said gaming revenue had dropped in Auckland during the first part of this financial year, in part because of less gambling by its premium players.
SkyCity’s international business revenue fell 20 per cent, he said at its annual general meeting in Auckland, which reflected fewer trips from its larger VIP customers.
‘‘However, I would highlight that activity in our international business can be quite volatile from period-toperiod reflecting a smaller number of large customers which can influence the business based on the timing of their trips."
Mortensen also addressed recent events in China, after 18 employees from Australia’s Crown Resorts casino were arrested in the country.
Police were reportedly preparing to charge them with organising gambling activities for mainland nationals overseas.
SkyCity does not have staff in China, but did use independent contractors there, although none of them had been detained in the raids.
Mortensen said it was confident those staff complied with the relevant laws and regulations, but warned the impact of the arrests remained uncertain.
SkyCity’s international business accounted for about 15 per cent of its revenue, and about 9 per cent of the total market in Australasia.
Half of those customers were from China.
‘‘Accordingly, we consider ourselves to be a relatively small player relative to our peers, and to have less exposure to economic conditions or changes in policy in China and broader Asia which may impact our international business.
‘‘We expect international business turnover to weaken further following recent events in China."
One shareholder asked about the company’s share price, which has fallen from $4.64 to $3.70 last week.
Chairman Chris Moller said the China events had clearly impacted all casinos, and warned on Friday that the share price would probably fall further.
But Mortensen said he was confident SkyCity was in a strong position to grow.
‘‘SkyCity Entertainment Group is in good shape, as we continue to celebrate record financial performances and make progress on our major growth projects.’’