SkyCity Entertainment Group reported a 22.3% decline in full-year 2026 profit to NZD 181.6 million, in line with revised guidance, as gaming revenue softened and costs rose. The group’s adjusted EBITDA dropped 44.2% to NZD 120.5 million, reflecting lower gaming activity and higher operating expenses, including NZD 14 million tied to the New Zealand International Convention Centre (NZICC) operations.
Gaming revenue fell 5.9% to NZD 557.9 million, driven by reduced contributions from gaming machines and tables amid regulatory changes such as Carded Play and weaker premium play. Operating expenses increased by NZD 50 million year-over-year, primarily due to NZICC-related costs, investments in online operations, higher labor expenses, and ICT upgrades for Carded Play. Notional free cash flow from New Zealand operations rose 21% to NZD 121.7 million, while capital expenditure declined by NZD 43 million to NZD 95.4 million.
The group’s debt-to-EBITDA ratio stood at 3.1 times under banking covenants, with management expecting it to fall below 2.0 times by the end of fiscal 2027, excluding online license expenditures. SkyCity also recorded a NZD 23.9 million provision for a AUD 21 million fine in Adelaide, alongside a AUD 42.9 million write-down of the business’s carrying value. Cost-saving measures are projected to yield NZD 30 million in benefits for fiscal 2027, rising to NZD 70 million in fiscal 2028.
Asset monetization efforts are progressing, with a target of NZD 275 million to NZD 300 million in gross proceeds by December 2026. The unconditional sale of Auckland’s 99 Albert Street and Victoria Street commercial properties for NZD 74.5 million to a joint venture between Mainland Capital and Russell Property Group is set for settlement in September 2026. The Grand by SkyCity is also in due diligence with an exclusive bidder, expected to have a high single-digit annualized EBITDA impact.
The NZICC, which opened in February 2026, hosted 141 events and approximately 100,000 visitations in its first year. Management now expects the venue to break even on a standalone EBITDA basis in fiscal 2028, one year later than previously targeted, due to current economic conditions. The Carded Play rollout across New Zealand casinos in July 2025 is aligned with guidance of a NZD 20 million to NZD 30 million EBITDA impact.
SkyCity is positioning for the regulated online casino market in New Zealand, with legislation enabling operations expected to take effect in the first half of 2027. All operators must be live by June 1, 2027, and the company has submitted an expression of interest for the online license auction scheduled for September 2026. The estimated market size is around NZD 1.4 billion, based on analysis by the Department of Internal Affairs and banking data.
In Adelaide, a non-binding agreement with the consumer business regulator (CBS) outlines a AUD 21 million fine, payable in three equal installments over two years. The group’s Building a Better Business (B3) remediation program is expected to conclude in early fiscal 2028, with an independent board and new standalone operating model slated for implementation by January 2028. A strategic review of Adelaide will continue through fiscal 2027.
