|Kiwi casino operator Sky City Entertainment Group has reported its smallest profits in over a decade following the $49 million write-off of its cinema assets.|
The New Zealand firm announced profits of just over one million dollars for the second half of 2007, a 97.1 percent drop, and stated that the sale of its Adelaide casino, which was placed on hold in the middle of last year, would not be proceeding.
However, the company reported that revenues from across the gaming group were slightly up on the first half of 2007 to $346.8 million with earnings before tax up 13.1 per cent to $102.7 million while net profits after tax before taking into account the cinema write-down were up 36.2 percent to $50.1 million.
It also said that takeover talks, which were believed to be with US private equity firms TPG and Apollo Management, have ceased.
Elmar Toime, Sky City’s Interim Chief Executive Officer, acknowledged that the performance of the firm’s cinema division has been a huge disappointment and stated that it had not lived up to the projections used to determine a price for the business when it was bought.
Sky City’s international business division, which woos high-rollers to its casinos, reported earnings before tax of $10.3 million after being hammered to the tune of $981, 315 for the final half of last year on the back of some high-stakes gamblers in Auckland winning big. Toime stated that Sky City would focus on diversifying these risks across a broader customer base and attract more players from South East Asia including Thailand, Singapore, Malaysia and South Korea.