However, SkyCity’s combined international business, or high rollers across all its five casinos, was down 38.7%, and turnover plunged from $7.2billion to $4.4billion.
Australian operations booked revenue declines with that country’s outlook predicting continued difficult trading through the second half period. While revenue declined 5.8% to $533.1million, after-tax profit rose 18% to $83.8million for the six-month period, with an interim dividend of 10c, down 4.8% on a year ago.
SkyCity shares were up almost 6% at $3.96 following the announcement.
SkyCity’s Auckland operation delivered 80% of the first-half normalised earnings before interest, tax, depreciation and amortisation for the group. The key driver of the result was the solid growth in combined New Zealand casino operations, Auckland improving significantly during the second quarter.
However, that was offset by reduced turnover of international business, challenging trading conditions in Darwin and a weaker Australian dollar, the company said. Forsyth Barr broker Suzanne Kinnaird said the core Auckland operation delivered a strong second quarter, but the international business was "materially weaker" and below expectations.
"Adelaide and Darwin also disappointed versus our expectations," Mrs Kinnaird said.
About the almost 39% plunge in high-roller gamblers, Mrs Kinnaird said there had been fewer visits from them and noted recent developments in China, such as a restriction on transferring funds, prompted a negative impact in VIP business. Craigs Investment Partners broker Peter McIntyre said positives were that Auckland had returned to growth in the second quarter, albeit not the high rollers, and Hamilton continued to trade well.
But on the negative side, the decline in high-roller business was material and the Australian properties continued to trade poorly and in difficult macro and competitive climates, Mr McIntyre said.
Mrs Kinnaird said the New Zealand International Conference Centre and Hobson St hotel projects were both tracking to plan and budget, with no change to the scheduled completion by the start of 2019.
However, while noting the developments on the Riverbank Project in Adelaide had started, Mrs Kinnaird the SkyCity comments "on the proposed expansion of Adelaide Casino" was "an area of interest" which she wanted more information on.
She said no financial guidance or recent trading insight had been provided by SkyCity, other than "modest growth" in Auckland, Hamilton "growth", "stable" for Adelaide, "difficult trading" ahead for Darwin and "further deterioration" for high-roller business.
Adelaide and Auckland were also facing a potential "disruption risk" due to construction activities.
However, she only noted a "modest" negative risk against the brokerage’s expectations at present.
