S&P confirma la calificación BBB- de SkyCity con una previsión estable  

S&P Global Ratings has affirmed the BBB- long-term issuer credit rating and BBB- long-term issue ratings for SkyCity Entertainment Group. Despite anticipating a weakening of credit metrics in the fiscal years 2024 and 2025, S&P maintains a stable outlook for the company. The rating agency highlights SkyCity’s commitment to taking creditor-friendly actions, prioritising debt reduction over the next two fiscal years to mitigate downward pressure on the rating.  

Economic challenges and earnings forecast  

S&P has adjusted its earnings forecast for SkyCity, citing subdued economic conditions in New Zealand, which have decreased revenues in gaming and non-gaming sectors. The debt-to-EBITDA ratio is expected to peak at 2.9x in fiscal 2024, with proactive measures anticipated to improve the ratio to 2.0x by fiscal 2026. These measures include suspending dividend payments until 2025 and utilizing the proceeds from the sale of a stake in Gaming Innovation Group (GiG) to pay off debts.  

Strategic actions for debt reduction  

SkyCity has taken several steps to support its credit metrics, including selling its entire 10.02 percent stake in GiG. This sale, expected to generate approximately NZD55 million (€31 million) after costs, is a significant part of SkyCity’s strategy to reduce its debt burden. Additionally, the company has delayed the opening of the Horizon Hotel to August 1, 2024, and incurred pre-opening operational costs for both the Horizon Hotel and the New Zealand International Convention Centre (NZICC).  

Regulatory oversight and prospects  

SkyCity continues to face heightened regulatory oversight, which has posed challenges to its operations. The conclusion of the Australian Transaction Reports and Analysis Centre’s (AUSTRAC) case against SkyCity Adelaide has resolved some regulatory uncertainties, yet the company remains under various ongoing reviews, including an independent review of SkyCity Adelaide’s suitability to hold a gaming license.  

Long-term outlook  

Despite current economic and regulatory challenges, S&P expects SkyCity’s earnings to improve from fiscal 2026 onwards. This improvement is anticipated to be driven by an economic recovery in New Zealand and the increased earnings potential from operations like NZICC, the Horizon Hotel, and car parks. The stable outlook reflects S&P’s confidence in SkyCity’s debt reduction efforts and its ability to maintain its credit profile within the rating tolerances over the next two fiscal years.  

By taking strategic actions to reduce debt and navigating regulatory challenges, SkyCity aims to strengthen its financial position and prepare for future growth as economic conditions improve. 

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