Thu, Feb 14, 1:34pm by Staff Writer
VIP business at casinos operated by Sky City Entertainment Group is on the up, with the Australia and New Zealand-based company’s turnover increasing by 74 per cent in the six months through December 2018.
Sky City boasted a $7.7 billion profit after gamblers found their way back to the company’s properties after a number of lean months.
The record period took away a huge chunk from the company as well, with lucky gamblers carrying on some extensive winning streaks.
The operator said that its half-year profits have fallen to $82 million, marking an 11 per cent drop. The revenue for the period remains relatively flat at $409 million.
Sky City chief executive Graeme Stephens commented on the company’s performance saying that the reported level of the company’s wins for their customers, who were relatively luckier during the period, shaved off some gains.
Mr Stephens also noted that Sky City are considering the amount of play in their casinos more in this volatile period, which showed stronger growth.
“While at a reported level Sky City handed back much of these gains to customer who were luckier than normal, we look through this volatility and focus on the amount of play, which was very strong,” Mr Stephens told the Sydney Morning Herald.
“Last year we were the lucky ones, with a win rate well above theoretical.”
The win rate was 0.98 compared with the theoretical rate of 1.35.
Mr Stephens attributed the record turnover on Sky City’s international business to third-party junket operators, repeat visits from “major” customers and bigger spending by punters.
He said the company was tipped to turn over $13 billion to $14 billion when it released its full-year results.
The return of foreign VIPs to the casinos is a major turnaround for an industry that went into meltdown and lost cashed-up Asian gamblers after the Chinese government arrested 19 serving and former staff from Crown Resorts in 2017.
“It is still volatile and tough to predict the next six months, but it has bounced back,” Mr Stephens said of the lucrative foreign high-rollers business.
“It has bounced back across the industry. Within the industry we are a small player, so a small number makes a difference.”
The company continues to struggle through difficult trading conditions in Darwin and staff costs in Adelaide.
Sky City shared traded at just $3.70 this week, falling 2.3 per cent.
Sky City reached an agreement in November with NewYork-based Delaware North to sell its casino complex in Darwin for a reported A$188 million.
$SKC #Sky City Entertainment Group Ltd. New Convention Centre Should Boost SkyCitys Earnings Growth in Medium Term: SkyCity Entertainment has finally secured a buyer for the Darwin casino. Delaware North, a U.S-based global food service and hospitality… https://t.co/HWk48Hs1QX pic.twitter.com/dnL29yH1zT
— ResearchPool (@ResearchPool) January 29, 2019
Delaware North is a major operator of airports, sports stadiums, gaming venues, pubs and food outlets across the globe.
They are best known to Australian residents for their operation of food and hospitality services at capital city airports and at the Australian Open tennis tournament in Melbourne.
SkyCity purchased the Darwin casino from MGM in 2004 for a reported A$195 million.
The New Zealand-based company has decided to focus its efforts towards strengthening its assets in New Zealand and Adelaide, which have proved more profitable than their venture up north.
SkyCity Darwin has 600 poker machines, more than 30 table games, four restaurants, five bars, a day spa and conference spaces.
It is Darwin’s only five-star hotel and resort.
SkyCity Darwin is another feather in the cap of Delaware North who recent acquired two Brisbane pubs and gaming venues, The Shafston Hotel and The Aspley Hotel in Brisbane.
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