MARKET RELEASE
SkyCity Entertainment Group Limited (SKC.NZX/SKC.AX)
20 August 2020
Updated Guidance on FY20 Results and Adelaide Impairment
SkyCity Entertainment Group Limited ("SkyCity") advises that it expects its reported earnings results for the financial year ended 30 June 2020 will be outside the previous guidance ranges (released on 17 June 2020 as part of the company's Equity Raising Investor Presentation).
SkyCity's normalised earnings results for FY20 are expected to remain within, and be at the upper end of, the previous guidance ranges.
Reported earnings will be higher than previous guidance as a result of higher estimates for the insurance proceeds for the damage to and reinstatement costs for the New Zealand International Convention Centre and Horizon Hotel arising from the fire. Offsetting this increase in reported earnings, and as previously advised, SkyCity proposes to recognise an impairment of Adelaide Casino's book value of A$150 million (NZ$161 million).
Updated Earnings Guidance
SkyCity's previous and updated earnings guidance is summarised in the following table. SkyCity's earnings estimates for FY20 remain subject to further review by its Board and auditor.
SkyCity will release its full FY20 financial results on 3 September 2020.
FY20 Results ($m) | Previous Guidance | Updated Guidance |
Reported EBITDA | 440-480(1) | 346-349(2) |
Reported NPAT | 330-360(1) | 234-236(2) |
Normalised EBITDA(3) | 185-205 | 199-202 |
Normalised NPAT(3) | 52-67 | 65-67 |
- Before any potential impairment of Adelaide Casino's book value.
- Includes the proposed impairment of Adelaide Casino's casino licence value.
- For an explanation on SkyCity's approach tonon-GAAP adjustments, refer to SkyCity's result presentations at https://www.skycityentertainmentgroup.com/investor-centre/financial-information/reports-presentations/.
Impairment of Adelaide Casino Book Value
SkyCity previously advised that it expected to make a partial impairment of Adelaide Casino's book value (as part of the company's Equity Raising Investor Presentation released on 17 June 2020), and that this would be a non-cash charge (estimated as at 30 June 2020) which would reduce Adelaide Casino's intangible asset value (casino licence). Consistent with its Non-GAAP Financial Information Policy, SkyCity will adjust for (ie. exclude) the impairment when presenting its normalised results for FY20.
SkyCity has now completed its annual impairment review and proposes to recognise in its FY20 financial statements an impairment of Adelaide Casino's book value of A$150 million (NZ$161 million). This impairment will be made against the A$283 million intangible asset value of Adelaide Casino's casino licence.
The proposed impairment has arisen due to revised expectations regarding the time frame for Adelaide Casino to achieve its long-term potential earnings following completion of the expansion project. The reduced earnings outlook for Adelaide Casino has been exacerbated in the short-to-medium term by the recent and expected ongoing impacts of COVID-19, including an expectation that International Business activity may take some years to recover.
The proposal to impair Adelaide Casino's book value remains subject to further review by SkyCity's Board and auditor.
ENDS
For more information, please contact:
Investors and analysts | Media |
Ben Kay | Kate Gourdie |
General Manager, Corporate | External Communications Manager |
Development & Investor Relations | Mobile +64 21 197 2845 |
DDI: +64 9 363 6067 | E-mail:kate.gourdie@skycity.co.nz |
E-mail:ben.kay@skycity.co.nz | |