SkyCity Entertainment Group has reported a notable decrease in its underlying EBITDA, which fell by 22.3% to NZ$181.6 million (approximately $107.7 million) for the fiscal year 2026. The reported EBITDA saw an even steeper decline of 44.2%, dropping to NZ$120.5 million ($71.5 million). This downturn is largely attributed to diminished gaming revenues and rising operational costs, which countered the growth observed in non-gaming sectors.
Net profit after tax also took a hit, decreasing by 37.6% to NZ$18.2 million ($10.8 million). Similarly, the underlying net profit plummeted by 46.9% to NZ$38 million ($22.5 million) for the year ending June 30.
The group's gaming revenue experienced a 5.9% decline, primarily impacted by the implementation of mandatory carded play in SkyCity's New Zealand casinos, alongside a drop in premium gaming and reduced visitor numbers and spending in the last quarter.
SkyCity estimated that the introduction of carded play negatively affected EBITDA by between NZ$20 million and NZ$30 million ($11.9 million to $17.8 million).
In contrast, non-gaming revenue increased by 13.4%, bolstered by the launch of the New Zealand International Convention Centre (NZICC) in February and growth in hotel and food and beverage services.
Operating expenses rose by 8.4%, reflecting costs related to the NZICC, investments in online gaming in preparation for New Zealand's regulated market, higher labor costs, and increased spending on technology and compliance.
CEO Jason Walbridge noted that the company has successfully implemented carded play in its New Zealand casinos, inaugurated the NZICC, and is preparing for the upcoming regulated online gambling market. He stated, “Our underlying results aligned with the guidance provided in May, which acknowledged weaker consumer discretionary spending in the last quarter of the year.”
Gaming revenue at SkyCity Auckland dipped by 11.3% to NZ$317.2 million ($188.1 million), with visitation falling to 1.7 million from 2 million the previous year. This decline was partially offset by a 16% rise in non-gaming revenue, which reached NZ$181.4 million ($107.6 million).
At the Auckland property, underlying EBITDA decreased by 14.2% to NZ$179.8 million ($106.6 million). The NZICC hosted 141 events and attracted around 100,000 visitors from its opening on February 11 until the financial year's end. SkyCity anticipates that its event pipeline will generate approximately 350,000 visits in fiscal 2027.
Meanwhile, SkyCity Adelaide's underlying EBITDA fell by 31.5% to A$19.5 million ($13.9 million), despite relatively stable revenue. Gaming revenue there decreased by 1.8% to A$143 million ($102 million), with total revenue at A$212.1 million ($151 million).
The company also recorded a A$43 million ($30.6 million) write-down on the Adelaide property and plans to initiate a strategic review in the first half of fiscal 2027. The Adelaide operation is undergoing the Building a Better Business Programme, aimed at remediation and transformation. Additionally, SkyCity has agreed to pay A$21 million ($15 million) and revamp leadership systems at the property as part of a settlement with South Australia's Liquor and Gambling Commissioner to address outstanding regulatory issues.
Looking ahead, SkyCity has refrained from providing fiscal 2027 guidance due to macroeconomic uncertainties but is aiming for NZ$30 million ($17.8 million) in annualized cost savings during the year, which is expected to increase to NZ$70 million ($41.5 million) in fiscal 2028. Walbridge commented, “We are evolving into a simpler, smarter, and more connected business, implementing further savings to achieve annualized benefits of NZ$30 million in FY27, growing to total benefits of NZ$70 million in FY28. This is a strategic response to our changing operating environment and the future direction of our business, especially regarding online gambling regulation.”