SkyCity Cuts FY26 Earnings Due to Cost Increases and Reduced Consumer Spending

SkyCity Entertainment Group has downgraded its earnings forecast for FY26 because of persistent macroeconomic issues, weaker consumer spending, and cost pressures that it faces within its business units in New Zealand and Australia. This new forecast made by the company was contained in a market update that was released on May 1.

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Revised Guidance

According to SkyCity Entertainment, the company currently expects its underlying EBITDA for FY26 to be in the range of NZ$180 million to NZ$190 million ($106 million to $112 million). This forecast falls below what the company previously forecasted of NZ$190 million to NZ$210 million. Additionally, the company has also revised its EBITDA forecast, which is currently at NZ$155 million to NZ$165 million ($91 million to $97 million). The former forecast was of NZ$170.6 million to NZ$190.6 million.

As per the company, the above conditions have affected its operations along with consumer visits in March 2026, and specifically those in Auckland and Adelaide. Higher costs of petrol became one of the factors exerting pressure on their clients, while other circumstances contributed to reducing discretionary spending.

SkyCity has emphasized that there is still considerable uncertainty about both the extent and duration of macroeconomic factors. Moreover, they stressed that should the situation worsen, their future perspective may suffer.

Cost Response

In view of the tough environment, SkyCity has already managed to introduce measures aimed at saving money, achieving more than NZ$10 million initially planned. Furthermore, new measures will be launched by SkyCity with the involvement of external consultants.

The revised guidance also reflects slightly higher costs linked to timing movements and foreign exchange impacts. Those additional pressures have contributed to the lower earnings range now expected for the year.

The company’s update suggests that it is working to offset weaker trading conditions through tighter cost control. Even so, the combination of softer demand and higher expense pressures has forced a reset of expectations for the full year.

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Asset Sales Update

SkyCity also provided an update on its asset monetisation program. The company confirmed it has entered into a non-binding agreement for the potential sale of the 99 Albert Street office building and investment properties on Victoria Street.

It is also seeking investor interest in The Grand Hotel. These steps form part of a wider effort to unlock value from assets as the company adjusts to the current operating environment.

The asset program gives SkyCity another lever to support its financial position at a time when earnings are coming under pressure. While the agreements remain non-binding, the company’s latest update shows that the process is moving forward.

Regulatory Change

Additionally, the company highlighted the fact that the act concerning online casino gambling in New Zealand entered into force on May 1. According to SkyCity, the issuance of licenses is anticipated from the beginning of 2027.

The timing adds another development to the company’s operating backdrop as it navigates a lower earnings outlook and a more challenging consumer environment. For now, the focus remains on managing costs, protecting trading performance, and progressing asset monetisation efforts.

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Source: Asia Gaming Brief