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New Zealand casino operator SkyCity Entertainment Group Ltd (SKC) said on Thursday underlying profit for the first half slipped 2 percent and revenues from international business suffered following a crackdown on gaming by China.
Normalised or underlying profit fell to NZ$83.7 million ($60.9 million) for the six months-ended Dec. 31 while revenues dropped over 6 percent to NZ$525.8 million, dragged lower by its international business.
International high-roller business slumped nearly 39 percent to NZ$4.4 billion while activity is expected to be weaker in the second half as well "due to fewer visits from larger customers and recent developments in China," the company said.
Eighteen employees of Australian rival Crown Resorts (CWN) were detained for several days by Chinese authorities for alleged gambling crimes late last year.
No charges were laid against them, but the detentions also hurt SkyCity's ability to attract Asian high-rollers, who had been behind the casino's recent strong performance.
SkyCity, which has six casinos in five locations in New Zealand and Australia, does not have an office in China or any China-based employees. However, it does engage independent contractors in China who help manage customer relationships.
Typically, about half of its total group turnover in the international business is from Chinese customers.
The company's business in Queenstown, renowned for its picturesque location set against the dramatic Southern Alps, suffered a more than 7 percent fall in total revenues.
The casino company got some respite from "solid growth" in its domestic properties, with Auckland improving significantly due to both higher footfalls and customer spend per visit.
Sky City owns and operates casinos, restaurants, hotels and convention centres in Auckland, Hamilton and Queenstown in New Zealand and in Adelaide and Darwin in Australia.
Until recently, dairy was the backbone of New Zealand's economy, representing about 25 percent of exports. But dairy prices have dropped sharply since scaling record highs in 2013, due to China's economic slowdown and global oversupply. Tourism, meanwhile, has continued to grow strongly.
($1 = 1.3772 New Zealand dollars)
