Profit makes hand-out void: Greens

The Green Party says Government subsidies are  unnecessary for SkyCity to build a convention...
The Green Party says Government subsidies are unnecessary for SkyCity to build a convention centre. Photo from: NZ Herald.
SkyCity Entertainment's record profits highlighted how unnecessary it was for the Government to change legislation in exchange for a new convention centre, Green Party MP Denise Roche said yesterday. Ms Roche questioned why such a profitable company was relying on a Government "hand-out".

"It's outrageous the Government is prepared to increase the legal number of pokies and gambling tables just so a corporate winner will build a place for people to have a conference," Ms Roche said.

SkyCity said in its interim profit announcement yesterday talks were continuing with the Government over the construction of a National Convention Centre, which if concluded would see the company invest $350 million in the project.

In return, it wants an early renewal of its Auckland casino licence beyond 2021, an increase in gaming and changes to gaming regulations.

Discussions had been progressing proactively since the National Government was returned in last year's elections, it said.

The Rugby World Cup provided a one-time revenue boost of $11.5 million and added $4.7 million to profit, the company said, adding the effect "was less significant than expected".

SkyCity filed a reported profit of $78.8 million for the six months ended December, 17.4% up on the previous corresponding period.

Earnings per share (EPS) rose to 13.7c, up from 11.7c. The interim dividend was 9c per share, up from 8c in the previous period.

Forsyth Barr broker Peter Young said SkyCity had upgraded its guidance to the high $140 millions for the full year, in line with his forecast of $148 million.

Auckland gaming machines and non-gaming revenue were the key driver for the profit.

"Most areas of the result were ahead or close to our expectations, with the major positive surprise the very strong performance from Auckland gaming machines," Mr Young said.

The disappointment was the low operating earnings contribution from the international business, while Darwin, as expected, remained a weak performer compared with the other casinos.

The Green Party opposed the Government's proposed deal with SkyCity to expand its gambling operations in Auckland, Ms Roche said.

In exchange for SkyCity's building a conference centre in central Auckland, the Government is understood to be considering allowing the casino to increase its legal number of gambling tables and poker machines.

dene.mackenzie@odt.co.nz

 

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