SkyCity Darwin Underperforms Due to Increased Club Pokies
SkyCity Entertainment Group reported disappointing results from their Darwin property in the last financial year, attributed largely to the increased competition from clubs and pubs in the Northern Territory.
The Northern Territory Government removed the cap on poker machines, allowing up to 55 machines in clubs and up to 20 machines in pubs. This increased competition hit the casino with its revenue (excluding International business) dropping 5.3 percent to $116.2 million.
“SkyCity Darwin achieved disappointing results which were adversely impacted by challenging trading conditions in the Northern Territory,” said John Mortensen, interim chief executive at SkyCity.
“The decline in SkyCity Darwin’s performance was primarily driven by weaker hotel demand and reduced food and beverage covers. Local gaming revenue was soft having been adversely impacted by increased competition from pubs and clubs.”
Despite these results, Mortensen said that the full-year results for the group were overall “very satisfying” and that the Darwin property remains a “core asset” for the group. The company recently applied for a 5-year casino license extension for the Darwin casino and announced that they remain “confident with the medium-to-long-term outlook for Darwin.”
SkyCity’s International business produced strong results with turnover increased by 32.7 percent to $12.4 billion.
“Growth in our International business continues to be supported by the increased recognition of our first-class service offering among Asian VIP customers, a continued focus on direct relationships and increased play at higher table differentials,” continued Mortensen.
“SkyCity has continued to invest in the International business over the past year through the development of new facilities and the expansion of our customer service team.”
Performance in the company’s Adelaide casino was also up 19.1 percent in earnings before interest, taxes, depreciation and amortisation to $25.6 million.
March 27, 2017