SkyCity Entertainment Group has reported a drop in revenue at the Adelaide Casino, citing ongoing construction work and a decline in the number of visitors as reasons for the drop in performance.
During the 2016-2017 financial year, revenue at Adelaide Casino was down 2.4 per cent, but it’s not as negative as it sounds – the casino still took in $148 million in revenue, excluding international business. Earnings before interest, taxes, depreciation and amortization (EBITDA) was down 16.8 per cent to $21.3 million.
SkyCity released a statement saying, “Adelaide Casino’s performance declined primarily due to reduced visitation and disruption from the early works programme for the Riverbank Precinct impacting revenue, and increased marketing and promotional costs.”
The company said it will be introducing new strategic initiatives to help improve the performance of the casino.
Overall, SkyCity reported a 69 per cent decline in annual profit down to $41.6 million across all its Australian and New Zealand properties, with a $95 million write-off at SkyCity Darwin mostly responsible for the decline.
However, modest growth in SkyCity’s New Zealand casinos resulted in normalised net profit rising 1.3 per cent to $143.6 billion.
SkyCity chief executive Graeme Stephens said that growth in New Zealand and lower net interest expenses were offset by reduced international business and weak trading conditions in Australia.
He said, “Performance improved across the financial year, with normalised EBITDA up slightly in the second half of the year on the previous corresponding period, and normalised NPAT up 5.3 per cent over the same period.”
The arrests of several Crown Casino employees in China late last year has resulted in less high roller visitors from China, who are some of the biggest spenders at Australia’s casinos.
The New Zealand owned company was recently granted approval to proceed with a $330 million upgrade to the Adelaide Casino, which will see the introduction of a 123-room boutique hotel, rooftop bar, multiple new restaurants and additional high-roller gaming facilities. The revamp to the casino is part of an overall development of the Torrens River Precinct which aims to make the area a major tourist destination for South Australia.