UPDATE ON COVID-19 IMPACTS AND RECENT TRADING

3 June 2020


Client Market Services
NZX Limited
Level 1, NZX Centre
11 Cable Street
WELLINGTON

Copy to:

ASX Market Announcements
Australian Stock Exchange
Exchange Centre
Level 6
20 Bridge Street
Sydney NSW 2000
AUSTRALIA


RE: SKYCITY ENTERTAINMENT GROUP LIMITED (SKC)
UPDATE ON COVID-19 IMPACTS AND RECENT TRADING


Please find attached an update on the impacts of COVID-19 and recent trading following
the re-opening of the company’s New Zealand properties (excluding Wharf Casino) on
14 May 2020.


Authorised by:


Jo Wong
Company Secretary
Phone: +64 9 363 6143
Email: jo.wong@skycity.co.nz

---

MARKET RELEASE

SkyCity Entertainment Group Limited
(SKC.NZX/SKC.AX)
3 June 2020
Update on COVID-19 Impacts and Recent Trading
Trading Update Since Re-Opening
As previously announced, SkyCity re-opened its New Zealand casino, entertainment and
accommodation facilities in Auckland, Hamilton and Queenstown (excluding the Wharf
Casino) on 14 May 2020.
Trading has been encouraging at the New Zealand properties in the period to 31 May 2020
(which included the Queen’s Birthday weekend), led by good performances from the
gaming businesses in Auckland and Hamilton. Key features of trading over this 18-day
period have been:
• The domestic gaming businesses in Auckland and Hamilton have achieved good
performances, ahead of internal expectations, particularly in electronic gaming
machines (EGMs), despite limited capacity, restrictions around mass gatherings and
physical distancing requirements. EGM revenues in Auckland and Hamilton over the
period represented 80% (on a like-for-like basis) of the average daily revenue in the
eight months to 29 February 2020. Table revenues have been improving from a slow
start (reflecting physical distancing requirements) and recent performance (in the last
week) in Auckland reflects a return to around 50% of normal domestic business.
• Hotel occupancy has averaged around 32% over the period, with much higher
occupancy on weekends (up to 90%) due to special offers to customers. Average room
rates are currently around 35% lower than pre COVID-19 rates.
• Food and beverage revenues have been growing steadily in line with expectations, but
remain significantly below pre COVID-19 levels.
• The revenues achieved, coupled with tight cost control, have resulted in the Auckland
and Hamilton properties being profitable and cash positive over the period. The New
Zealand Government’s wage subsidy continues to be helpful in supporting staff that
will only be fully deployed when the country moves to Alert Level 1.
• SkyCity Online Casino continues to trade strongly with over 21,000 customer
registrations as at 31 May 2020 and was profitable in April and May 2020.
The health and safety of customers and staff remains a key focus and SkyCity is committed
to adhering to the Ministry of Health’s guidelines for operating at Alert Level 2 in New
Zealand. Consequently, entry to all SkyCity’s New Zealand casinos continues to be

restricted to SkyCity Premier Rewards members only pending further guidance from the
Ministry of Health.
Moving to Alert Level 1 in New Zealand
The New Zealand Government recently signalled that the Alert Level 2 settings will be
reviewed on 8 June 2020 and that a decision on moving to Alert Level 1 will be considered
no later than 22 June 2020. At Alert Level 1, restrictions on mass gatherings and physical
distancing requirements are expected to be further relaxed, which may allow events,
promotions and promotional draws to recommence at SkyCity’s New Zealand properties.
Although international travel borders are expected to remain closed at Alert Level 1, the
reopening of the trans-Tasman border between New Zealand and Australia appears
increasingly likely over the next few months.
Staff Restructuring in New Zealand
Although early trade has been positive, SkyCity still expects that its business will be smaller
and domestically focused for the short to medium term and, therefore, its employee base
needs to be downsized to reflect this.
SkyCity is part-way through a consultation process on a proposal to reduce its New Zealand
workforce by around 700 rostered (waged) employees (as previously flagged to the market
on 12 May 2020), which is intended to ensure that SkyCity’s businesses are well prepared to
operate in the new post COVID-19 environment. This restructure is expected to be
completed by the middle of June 2020.
SkyCity expects total annualised cost savings of around $50 million once the full
restructuring has been implemented for both salaried employees and rostered (waged)
employees (around 900 in total).
Re-Opening of Adelaide Casino
SkyCity’s Adelaide Casino remains closed. However, based on the South Australian
Government’s current three-stage approach to easing the COVID-19 restrictions, SkyCity
expects to be able to re-open some food and beverage outlets from next week and
Adelaide Casino in late June or early July 2020.
Development works on the Adelaide Casino expansion project and associated master
planning projects continue to progress well and remain on-budget and on-time.
Funding Plan
As previously flagged, SkyCity continues to progress the development of a funding plan to
support the business over the medium-term. SkyCity expects to finalise its funding plan
over the next few weeks after taking into account the trading performance of its New
Zealand properties since re-opening.

SkyCity continues to have a strong liquidity position with around $330 million of cash and
undrawn debt facilities currently available as at 31 May 2020. SkyCity does not expect to
require any waivers for its 30 June 2020 debt covenants.
SkyCity will provide further updates as new material information becomes available.

ENDS


For more information, please contact:
Investors and analysts Media
Ben Kay
General Manager, Corporate
Development & Investor Relations
DDI: +64 9 363 6067
E-mail: ben.kay@skycity.co.nz

Liza McNally
Chief Marketing Officer
DDI: + 64 9 363 7137
Mobile +64 2194 4989
E-mail: liza.mcnally@skycity.co.nz