Sky City Entertainment, which owns or operates three casinos in New Zealand and two more in Australia, posted a 16% decline in profits during the first six months of its fiscal year ending Dec. 31. Net profit was $66.3m on revenue of $487.3m (-1.4%), although normalized profit (excluding extraordinary one-time costs) was down a mere 3.4% to $74.4m and normalized revenue rose 1.4% to $495.7m. SkyCity CEO Nigel Morrison said $4.7m of those missing profits came as a result of the previous year’s H1 having benefited from an influx of visitors coming to watch the Rugby World Cup. A further $8.4m impact came from the decline in international business win rate (1.06% v. 1.64% in the previous H1).
Undaunted by this reversal of fortune, SkyCity maintains that it’s on track to meet its $140m full-year normalized profit target. Morrison has big plans for its Queenstown casino, having assumed full ownership of the gaming joint after buying out former partner Skyline Enterprises in December. Morrison wants to upgrade the Queenstown venue’s residential facilities to include VIP gaming rooms and 10-15 large presidential-style suites to accommodate high-rollers from China. SkyCity is also talking with award-winning Auckland restaurateurs about setting up in Queenstown to (literally) sweeten the VIP pot. Under the former joint ownership with Skyline, maximum wagers at the Queenstown casino were limited to $15k a pop, but Morrison now wants to raise this to $150k, the current upper limit at SkyCity’s Auckland venue. Morrison is working to ensure “we have systems in place to bring this in this year.”
The pursuit of Chinese VIP gamblers is a region-wide obsession. On Friday, the Korea Herald reported that South Korean casino operator Grand Korea Leisure (GKL) would be doubling its Chinese VIP marketing staff from 29 members to 60. GKL, which operates three casinos in Seoul and Busan under the Seven Luck brand, said table games drop in Q4 2012 topped KRW one trillion (US $927m) for the first time. Chinese gamblers accounted for 36.7% ($364m) of this total, a rise of 80.2% year-on-year. GKL hopes the additional marketing staff chasing Chinese VIPs will push this total significantly higher a year from now.
