SkyCity forecasts bumper 2021 profits

by Charlotte Lee Last Updated
SkyCity forecasts bumper 2021 profits

New Zealand-headquartered casino operator SkyCity Entertainment has predicted a 33 per cent surge in its adjusted profit for the 2021 financial year.

Market Screener reports that a strong domestic demand for electronic gaming is behind the profit rise.

SkyCity is expecting a normalised net profit after tax between NZ$84 million and NZ$88 million in 2021, compared with NZ$66.3 million last financial year.

The company’s local gaming business in New Zealand has continued to see strong performance, while its Australian casino, SkyCity Adelaide, has shown consistent performance.

The company has already recently established an offshore online gaming arm, SkyCity Malta, which has produced consistent performances.

“SkyCity’s tourism-related businesses in New Zealand and South Australia continue to be impacted by ongoing border closures, excluding the Trans-Tasman border, which reopened on April 19, but are benefitting from positive domestic tourism, particularly on weekend and holiday peaks,” the company said.

SkyCity said it expects to comfortably meet its financial covenants for the June 30 testing period and therefore pay a final dividend in September.

AUSTRAC to investigate Australian casino operators

Despite the good financial news, it was revealed in early June that the company was under scrutiny by the Australian financial crimes watchdog for potential breaches of anti-money laundering laws.

The dual listed NZX and ASX company saw its share prices fall 6.5 per cent off the back of the news, which analysts have predicted is from historic instances during the past decade.

The operators’ Adelaide venue is under investigation for potential non-compliance with the Australian Anti-Money Laundering and Counter-Terrorism Financing Act 2006 and Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument 2007.

National Australia Bank, Crown Perth and Star are all facing the possibility of multi-million-dollar penalties for potential breaches of anti-money laundering laws.

SkyCity said the potential serious non-compliance included concerns relating to ongoing customer due diligence.

“These concerns have been identified in the course of a compliance assessment which AUSTRAC commenced in September 2019 focusing on SkyCity Adelaide’s management of customers identified as high risk and politically exposed persons.

Legal action brought against SkyCity for “missing” millions

Last March, the casino operator had a legal claim made against it by a Hong Kong and Chinese millionaire, who alleged that the organisation committed negligence and breach of trust in relation to an alleged $4.84 million sum of money.

According to the complaint in May 2019, Ma visited SkyCity to gamble as part of Fang’s junket.

But Sydney-based Xie was in fact organising proceedings using China-based Fang’s junket licence.

Chinese VIPs typically pay money to junkets via bank transfer prior to their trip.

This gives them credit in the form of non-negotiable “rolling chips” at a casino VIP room, circumventing the strict controls on the movement of large amounts of money out of China.

Casino partners with junkets and usually pay them a monthly commission, provided the gamblers they bring generate a minimum guaranteed rolling chip turnover.

The junkets will settle up once the wealthy gamblers have returned to China.

Ma hit SkyCity on May 21, 2019 in the company of a Ms Goh, who was employed or engaged by Mr Xie as an escort or hostess for high-rollers, according to the lawsuit.

The businessman had to return to Hong Kong to attend his son’s graduation and he planned to collect his winnings in June on his return to Adelaide, where he has significant business investments.

According to court documents, on May 29, someone at SkyCity transferred most of the money to Xie, who has made no attempt since to settle with Ma.

The lawsuit accuses Xie of being a “dangerous and violent criminal” with “links with Asian triad criminal gangs”.

Back to top