The strong financial performance forecast in the first half of the financial year had eventuated, SkyCity Entertainment said yesterday.
In a note to the NZX, Sky City said it expected its interim operating profit for the six months to December to be up between 21% and 23% on the previous corresponding period, to between $170 million and $173 million.
The reported profit was likely to rise by up to 30% to $71 million.
The increases were due to strong trading performances by all new Zealand businesses, strong growth in turnover in the international business, significant cost savings achieved at the Adelaide Casino and lower funding costs.
The company's international business relates to its high-roller gamblers and turnover in the sector was slightly above $7 billion in the period.
Forsyth Barr broker Peter Young said SkyCity had followed its encouraging start to the year with first-half guidance well ahead of the previous corresponding period.
"Given the positive start to the year that was confirmed in November, a strong first-half result was expected. However, the reported profit in particular is well ahead of our expectations and looks to be centred on lower interest costs.''
The soft local gaming in Adelaide continued and while Darwin appeared to be improving locally, most of the gains were also centred on international business and margins, he said.
There was no new commentary around finalising Adelaide development plans or the replacement of Adelaide management.
SkyCity would provide an update on the first stage of the Auckland Atrium redevelopment, tracked over the busy Christmas period, at its first-half results on February 11, Mr Young said.
SkyCity shares are rated a hold, according to the average rating of analysts polled by Reuters.
The stock last traded at $4.16 and has gained 6.7% the past 12 months.
