* H1 underlying profit down 2 pct to NZ$83.7 mln
* International business revenue slumps 39 pct
* Revenues hit by fewer VIP customers, China crackdown
* Shares up 4 pct on strong growth in Auckland
(Adds analyst comment, shares)
By Swati Pandey
SYDNEY, Feb 9 New Zealand casino operator
SkyCity Entertainment Group Ltd 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 high-roller business revenue slumped nearly 39
percent to NZ$4.4 billion and 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
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.
Shares in the company have already lost more than 7 percent
of their value so far this year on concerns about SkyCity's
ability to lure Chinese high-rollers.
On Thursday, they were up about 4 percent at NZ$3.89 each.
"The underlying Auckland business, which is their real
driver, had a pretty strong second quarter which was a bit of a
relief for investors," said Jeremy Simpson, analyst at Forsyth
"Although for the second half, growth is expected to be
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 due to China's economic slowdown and
global oversupply. Tourism, meanwhile, has continued to grow
($1 = 1.3772 New Zealand dollars)
(Reporting by Swati Pandey; Editing by Lisa Shumaker and