The SKYCITY Entertainment Group Limited (ASX: SKC) share price is pushing higher on Thursday following the release of its interim results.
The casino and resorts operator's shares are up almost 2.5% to $3.53 in early afternoon trade.
How did SKYCITY perform in the first half?
SKYCITY released a complex first half result due to the impacts of the NZICC fire and the sale of the Auckland car pack concession.
In respect to the latter, in August SKYCITY announced the completion of the sale of a long-term concession over its Auckland car parks to Macquarie Principal Finance Group for NZ$220 million.
As a result, on a reported basis, the company delivered a 75.4% increase in revenue to NZ$721.7 million and a 296% lift in net profit after tax to NZ$328 million during the first half.
Whereas on a normalised basis, revenue was down 7.9% to NZ$490.9 million and net profit after tax was 16.4% lower at NZ$75 million. Normalised earnings per share came in at 11.3 NZ cents.
Despite the decline in its normalised earnings, the SKYCITY board elected to maintain its interim dividend at 10 NZ cents per share.
Segment performance.
The Auckland business saw its revenue drop 0.7% to NZ$305.6 million and EBITDA fall 0.4% NZ137.4 million during the half.
Things were more positive for the Hamilton and Queenstown businesses. Hamilton delivered an 8% lift in revenue to NZ$34.1 million and a 6.2% increase in EBITDA to NZ$14.9 million. Whereas Queenstown saw its revenue rise 8.1% to NZ$7.1 million and EBITDA jump 21.9% to NZ$1.5 million.
Across in Australia the company's Adelaide business posted a 0.8% decline in revenue to A$77.4 million but a 2.9% rise in EBITDA to A$12.8 million.
A major drag on its overall results was SKYCITY's normalised International Business (IB). During the half IB revenue fell 40.1% to NZ$61.9 million and its EBITDA dropped 66.7% to NZ$8.2 million.
Coronavirus update.
Management revealed that it has been closely monitoring the coronavirus outbreak.
There has been no significant impact to its business over the last three weeks, but it has experienced lower than expected IB activity during the Lunar New Year.
Though, it was quick to point out that 90% of group normalised EBITDA is derived domestically, with just 5% generated by China-based customers.
Outlook.
The company now expects its FY 2020 normalised EBITDA to be slightly under NZ$300 million. This compares to its previous guidance for "some growth in FY20 Group normalised EBITDA" on FY 2019's NZ$342.7 million.
On the bottom line it expects a normalised net profit after tax around NZ$130 million. Though, management has warned that it is still too early to estimate the future financial impacts from the coronavirus outbreak.
A final dividend of 10 cents per share is expected to be declared in August.
