February 8, 2018 / 9:08 PM / 8 months ago

UPDATE 2-NZ's SkyCity profit climbs as international casino business turns up

* H1 profit up 8 pct to NZ$90.3 mln

* Revenue up 4 pct to NZ$545 mln

* CEO “reasonably confident” of modest full-year growth (Adds CEO comments, changes dateline)

By John Mair

WELLINGTON, Feb 9 (Reuters) - New Zealand casino operator SkyCity Entertainment Group on Friday posted a nearly 8 percent rise in underlying first-half profit helped by a recovery in its international business, and said it was on track to post modest growth this year.

Chief Executive Graeme Stephens said the international environment had improved after crackdowns by Beijing on casino marketing and capital outflows had cast a chill over the industry last year.

“I think the whole industry held its breath and it’s starting to function a bit more normally now. We’re definitely benefitting a bit from that,” Stephens told Reuters.

Normalised or underlying profit for the six months-ended Dec. 31 was NZ$90.3 million ($65.2 million) compared to NZ$83.7 million a year ago. Revenue rose about 4 percent to NZ$545 million.

Turnover from the company’s international business grew about 9 percent, with about half of that typically coming from Chinese customers.

SkyCity said international turnover is expected to improve in the second half of fiscal 2018 and it continues to target NZ$10 billion in total turnover for 2018 due to positive bookings for the Chinese New Year period.

“We’re reasonably confident we can still deliver on the guidance for the full year, which was modest growth,” Stephens said.

“The swing factor in that will be the international business again, and that will come down to the next month or two with Chinese New Year.”

Stephens said he was comfortable with the international business accounting for around 10 percent of earnings, even up to 15 percent, but did not want to be overly reliant on it.

“It’s very volatile ... so we wouldn’t want to be too exposed,” he said

At 1212 GMT, shares in SkyCity were down 0.25 percent to NZ$4.02, outperforming a main index loss of 1.4 percent after another day a large falls on Wall Street.

AUCKLAND PROJECT

SkyCity, which owns and operates casinos, restaurants, hotels and convention centres, said there had been improvements in the construction of the New Zealand International Convention Centre and Hobson Street hotel projects over the last six months.

The convention centre is one of two major Fletcher Building Ltd projects where delays and cost over-runs have hurt New Zealand’s biggest builder, and losses from the jobs prompted it to warn on Thursday it expects to breach some of its loan covenants.

Stephens said there were no indications that Fletcher’s troubles would affect the project’s completion date, which had previously been delayed by six months to the middle of 2019.

SkyCity announced an interim dividend of 10 New Zealand cents per share, unchanged from a year earlier.

$1 = 1.3841 New Zealand dollars Reporting by John Mair in Wellington and Chandini Monnappa in Bengaluru; Editing by Stephen Coates

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