SkyCity issues FY25 earnings warning as market conditions ‘deteriorate’
SkyCity Entertainment Group has warned group EBITDA for the 2025 full-year is likely to fall below the lower end of its restated guidance range due as conditions in the market continued to “deteriorate”.
In a trading update released Tuesday, SkyCity said group EBITDA could drop approximately 4% below the bottom end of full-year guidance, which is between NZ$225 million (US$124 million) and $245 million.
Upon publishing H1 data in February, the operator said this followed declines across revenue, underlying EBITDA and net profit during the first half of its financial year.
Why will SkyCity miss full-year targets?
With tough market conditions continuing in the second half, SkyCity said spend per visit across its venues continued to fall. This, the group said, made forecasting difficult.
SkyCity’s Auckland property saw reduced spend per visit across both hospitality and gaming in H1. However, casinos in Hamilton and Queenstown have performed broadly in line with expectations.
Focusing on Adelaide, SkyCity said performance has been hit by lower visitation and spend by VIP customers. It puts this down to an uplift in its anti-money laundering and gambling harm minimisation programme.
On the flip side, electronic gaming machine terminal turnover in South Australia grew year-on-year. SkyCity noted an uplift programme continued at the Adelaide property. Total spend on this initiative is set to be $60 million between FY25 and FY27.
Difficult conditions having ‘significant’ impact
Speaking in the update, CEO Jason Walbridge said while he was pleased with overall visitation across SkyCity properties, “difficult” market conditions continued to impact SkyCity.
“The difficult market conditions that businesses like ours – which are reliant on discretionary consumer spending – are experiencing continue to have a significant impact on both our revenue and earnings,” Walbridge said.
“We continue to be pleased with the levels of visitation we are seeing across our precincts. We are adjusting our underlying cost base where appropriate, in response to lower revenue levels we are currently experiencing.”
However, Walbridge remained upbeat in the longer term. He pointed to next year’s scheduled opening of the New Zealand International Convention Centre (NZICC) as a key highlight.
“Notwithstanding these challenging conditions, we remain optimistic that as consumer confidence returns and spend begins to lift, SkyCity is well placed to maximise opportunities in front of us,” he said. “This includes the NZICC opening in February 2026.”
A future online for SkyCity?
Another area of note for SkyCity is online gambling. Although not referenced by Walbridge in the update, the group did say it was preparing for the launch of regulated online casino in New Zealand. This is due in 2026 and SkyCity is working with the government as it prepares regulations for the market.
Cabinet papers filed in September 2024 said SkyCity was one of a few grey market operators interested in applying for an iGaming licence.
Tab NZ, Grand Casino Dunedin, Christchurch Casino, Class 4 societies, 888, Bet365, SpinBet, Spin City and Super Group (including Betway) were also listed as interest parties.