INTERIM RESULT FOR THE SIX MONTHS ENDED 31 DECEMBER 2021

▪
▪
▪
▪
▪
▪
2

3

4

5

7

8

9

10
▪
▪
▪
▪
▪
▪
•
•
•
▪
•
•
•
▪

11
▪
▪
•
•
•
▪
•
•
•
▪
•
•
•
▪
•
•
▪
▪

12
▪
▪
▪
▪
▪
▪
•
•
▪
▪
▪
▪
▪

13
▪
•
•
•
•
▪
▪
▪
▪
▪
▪
▪
▪

14
▪
▪
▪
▪
▪
▪

16
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪

17
▪
•
•
•
•
•
▪
▪
17
▪
•
•
•

▪
•
•
▪
▪
18

▪
▪
▪
▪
•
▪
•
•
▪
•
19

▪
▪
▪
▪
▪
▪
▪
▪
▪
21

22
▪
•
•
•
▪
•
•
•
▪
▪
▪
▪
▪

23
▪
▪
▪
▪
▪
▪
▪
▪

25
25

26
26
▪
•
•
▪
•
•
▪
•
•
•

27

28
28
▪
•
•
•
•
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪

30
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪

31
31
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪

▪
•
•
•
▪
•
•
•
▪
▪
▪
▪
33

34
▪
▪
•
•
•
•
•
▪
•
•
•
•
•

35
----

▪
•
•
•
•
•
▪
•
•
•
36

37

38

▪
▪
•
•
•
▪
•
•
•
•
▪
39

▪
▪
•
•
▪
•
•
•
▪
▪
40

▪
▪
•
•
▪
▪
▪
41

▪
▪
▪
•
•
▪
•
▪
•
▪
▪
42

▪
▪
▪
▪
•
•
▪
43

▪
▪
•
•
•
•
•
•
44

45
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪

46
46
▪
•
•
▪
▪
▪
▪
▪

▪
•
•
•
▪
47

▪
▪
▪
48

---

SkyCity Entertainment Group Limited
Interim Financial Statements
for the six month period ended 31
December 2021










For and on behalf of the board:










_______________________ _______________________
Julian Cook Jennifer Owen
Chairman Chair of the Audit and Risk Committee

11 February 2022

PricewaterhouseCoopers, PwC Tower, 15 Customs Street West, Private Bag 92162, Auckland 1142 New Zealand
T: +64 9 355 8000, www.pwc.co.nz


Independent auditor’s review report
To the shareholders of SkyCity Entertainment Group Limited

Report on the interim financial statements
Our conclusion
We have reviewed the interim financial statements of SkyCity Entertainment Group Limited (the
Company) and its subsidiaries (the Group), which comprise the balance sheet as at 31 December
2021, the income statement, the statement of comprehensive income, the statement of changes in
equity and the statement of cash flows for the six month period ended on that date, and significant
accounting policies and other explanatory information.
Based on our review, nothing has come to our attention that causes us to believe that the
accompanying interim financial statements of the Group do not present fairly, in all material respects,
the financial position of the Group as at 31 December 2021, and its financial performance and cash
flows for the six month period then ended, in accordance with International Accounting Standard 34
Interim Financial Reporting (IAS 34) and New Zealand Equivalent to International Accounting
Standard 34 Interim Financial Reporting (NZ IAS 34).
Basis for conclusion
We conducted our review in accordance with the New Zealand Standard on Review Engagements
2410 (Revised) Review of Financial Statements Performed by the Independent Auditor of the Entity
(NZ SRE 2410 (Revised)). Our responsibility is further described in the Auditor’s responsibility for the
review of the financial statements section of our report.
We are independent of the Group in accordance with the relevant ethical requirements in New
Zealand relating to the audit of the annual financial statements, and we have fulfilled our other ethical
responsibilities in accordance with these ethical requirements. In addition to our role as auditor, our
firm carries out other services for the Group in the areas of tax compliance and other assurance and
agreed-upon-procedure services in relation to: compliance with banking and debt covenants; the
allocation of Community Trust revenue; the shareholder vote count at the Annual General Meeting;
and the reconciliation of normalised results to reported results. The provision of these other services
has not impaired our independence.
Emphasis of matter – impact of the NZICC fire
We draw attention to Note 7 in the interim financial statements, which describes the impact of the fire
on 22 October 2019 at the New Zealand International Convention Centre (NZICC) and the adjacent
Horizon Hotel, and the related significant judgements and estimates.
The fire caused extensive damage and material income, expense and asset balances related to the
fire are included in the interim financial statements. These amounts are based on estimates, including
the extent of damage to the NZICC, uncertain costs to remediate, the percentage of contingency
included in the estimates and the timeline for remediation. There is, therefore, material uncertainty
inherent in the balances recorded and the amounts recognised in the interim financial statements.
Consequently, the actual financial impacts may differ from the estimates included in these interim
financial statements, and those differences may be material. Our conclusion is not modified in respect
of this matter.

PwC
Emphasis of matter – uncertainty regarding the outcome of regulator investigation
We draw attention to Note 14 in the interim financial statements which describes the uncertainty
related to the outcome of the investigation of SkyCity Adelaide Pty Ltd by the Australian Transaction
Reports and Analysis Centre (AUSTRAC). Our conclusion is not modified in respect of this matter.
Directors’ responsibility for the financial statements
The Directors of the Group are responsible on behalf of the Company for the preparation and fair
presentation of these interim financial statements in accordance with IAS 34 and NZ IAS 34 and for
such internal control as the Directors determine is necessary to enable the preparation and fair
presentation of interim financial statements that are free from material misstatement, whether due to
fraud or error.
Auditor’s responsibility for the review of the financial statements
Our responsibility is to express a conclusion on the interim financial statements based on our review.
NZ SRE 2410 (Revised) requires us to conclude whether anything has come to our attention that
causes us to believe that the interim financial statements, taken as a whole, are not prepared in all
material respects, in accordance with IAS 34 and NZ IAS 34.
A review of interim financial statements in accordance with NZ SRE 2410 (Revised) is a limited
assurance engagement. We perform procedures, primarily consisting of making enquiries, primarily of
persons responsible for financial and accounting matters, and applying analytical and other review
procedures.
The procedures performed in a review are substantially less than those performed in an audit
conducted in accordance with International Standards on Auditing and International Standards on
Auditing (New Zealand) and consequently does not enable us to obtain assurance that we might
identify in an audit. Accordingly, we do not express an audit opinion on these interim financial
statements.
Who we report to
This report is made solely to the Company’s shareholders, as a body. Our review work has been
undertaken so that we might state to the Company’s shareholders those matters which we are
required to state to them in our review report and for no other purpose. To the fullest extent permitted
by law, we do not accept or assume responsibility to anyone other than the shareholders, as a body,
for our review procedures, for this report, or for the conclusion we have formed.

The engagement partner on the review resulting in this independent auditor’s review report is Richard
Day.

For and on behalf of:





Chartered Accountants Auckland
11 February 2022

-1-

SkyCity Entertainment Group Limited
Income Statement
For the six month period ended 31 December 2021


Unaudited
6 months
31 December
Restated*
Unaudited
6 months
31 December
2021 2020

Notes $'000 $'000
Revenue 5 216,755 315,710
Other income 6 20,573 67,457
NZICC fire related income 7.a 52,483 66,770
NZICC fire related costs 7.b (56,330) (66,664)
Employee benefits expense (123,319) (131,285)
Impairment 12,13 (6,236) -
Other expenses (44,449) (51,792)
Directors' fees (598) (488)
Gaming taxes (13,251) (15,851)
Direct consumables (14,870) (19,426)
Marketing and communications (6,581) (7,613)
Community contributions, levies and sponsorships (3,768) (6,356)
Earnings Before Interest, Taxes, Depreciation and Amortisation Expenses
(EBITDA)
20,409 150,462
Depreciation and amortisation expense (44,906) (40,484)
Depreciation on right-of-use assets (2,934) (574)
(Loss)/Earnings Before Interest and Tax (EBIT) (27,431) 109,404
Net finance costs (17,169) (14,042)
(Loss)/Profit Before Income Tax (44,600) 95,362
Income tax benefit/(expense) 11 10,882 (17,503)
(Loss)/Profit for the Period Attributable to Shareholders of the Company

(33,718) 77,859
Earnings per share for Profit Attributable to the Shareholders of the
Company:

Basic and diluted (loss)/earnings per share (4.5) 10.3
* Refer to note 12 for details on prior period restatement

The above income statement should be read in conjunction with the accompanying notes.

-2-


SkyCity Entertainment Group Limited
Statement of Comprehensive Income
For the six month period ended 31 December 2021



Unaudited
6 months
31 December
Restated*
Unaudited
6 months
31 December
2021 2020

$'000 $'000
(Loss)/Profit for the Period (33,718) 77,859
Other comprehensive income:

Items that may be subsequently reclassified to profit or loss
Foreign Currency Translation Reserve
Exchange differences on translation of overseas subsidiaries (4,584) (1,072)
Cashflow Hedge Reserve
Cash flow hedges - revaluations 4,277 (36,855)
Cash flow hedges - transfer to finance costs 1,184 41,296
Cash flow hedges - income tax (1,529) (1,257)
Cost of Hedging Reserve
Cost of hedging reserve - revaluations (212) (251)
Cost of hedging reserve - transfer to finance costs 462 462
Cost of hedging reserve - income tax (70) (59)
Other Comprehensive (Loss)/Income for the Period, Net of Tax (472) 2,264
Total Comprehensive (Loss)/Income for the Period (34,190) 80,123
* Refer to note 12 for details on prior period restatement

The above statement of comprehensive income should be read in conjunction with the accompanying notes.

-3-

SkyCity Entertainment Group Limited
Balance Sheet
As at 31 December 2021


Unaudited
31 December
Restated*
30 June
Restated*
1 July
2021 2021 2020

Notes $'000 $'000 $'000
ASSETS
Current Assets
Cash and bank balances 74,867 49,940 54,224
Receivables and prepayments 31,804 33,405 42,252
Derivative financial instruments 4 156 53,288
Inventories 7,715 7,187 6,628
Current tax receivables 16,538 - 1,989
NZICC fire recoveries 7,c 148,659 175,352 49,571
Assets classified as held for sale 13 26,174 13,517 11,019
Total Current Assets 305,761 279,557 218,971
Non-current Assets
Property, plant and equipment 1,366,143 1,370,762 1,528,902
Intangible assets 12 621,124 627,065 630,592
Finance lease receivable 12,176 11,605 10,574
Other non-current assets 2,000 - -
Derivative financial instruments 4,843 4,109 23,100
Investment properties 124,380 124,368 72,400
Deferred tax assets 14,314 9,740 6,910
Right-of-use assets 123,882 126,755 51,967
NZICC fire recoveries 7,d 181,000 233,000 227,000
Total Non-current Assets 2,449,862 2,507,404 2,551,445
Total Assets 2,755,623 2,786,961 2,770,416
LIABILITIES
Current Liabilities
Payables and provisions 175,291 200,165 221,842
Interest bearing liabilities 10 - 48,031 302,509
Current tax liabilities 823 16,256 776
Derivative financial instruments 1,457 - 6,113
Lease liabilities 3,309 3,014 485
Deferred licence value 251 2,088 153,165
Total Current Liabilities 181,131 269,554 684,890
Non-Current Liabilities
Interest bearing liabilities 9 597,401 440,964 282,731
Non-current payables 22,136 20,317 10,569
Lease income in advance 32,866 36,310 39,815
Derivative financial instruments 2,366 7,528 24,375
Deferred tax liabilities 47,256 51,975 39,903
Lease liabilities 114,164 115,793 52,188
Deferred licence value 207,436 207,436 214,972
Total Non-current Liabilities 1,023,625 880,323 664,553
Total Liabilities 1,204,756 1,149,877 1,349,443
Net Assets 1,550,867 1,637,084 1,420,973
EQUITY
Share capital 1,339,278 1,338,223 1,288,287
Reserves (23,451) (22,979) (33,321)
Retained earnings 235,040 321,840 166,007
Total Equity 1,550,867 1,637,084 1,420,973
* Refer to note 12 for details on prior period restatement

The above balance sheet should be read in conjunction with the accompanying notes.

-4-

SkyCity Entertainment Group Limited
Statement of Changes in Equity
For the six month period ended 31 December 2021



Share
Capital Reserves
Retained
earnings
Restated*
Total
Equity

Notes $'000 $'000 $'000 $'000
Balance as at 1 July 2021 1,338,223 (22,972) 335,767 1,651,018
Adjustment on change in accounting policy 12 - (7) (13,927) (13,934)
Balance as at 1 July 2021 restated

1,338,223 (22,979) 321,840 1,637,084
Total comprehensive loss - (472) (33,718) (34,190)
Dividends paid 8 - - (53,082) (53,082)
Share rights issued for employee service 3,363 - - 3,363
Net movement in treasury shares (2,308) - - (2,308)
Balance as at 31 December 2021

1,339,278 (23,451) 235,040 1,550,867
Balance as at 1 July 2020 1,288,287 (33,321) 179,641 1,434,607
Adjustment on change in accounting policy 12 - - (13,634) (13,634)
Balance as at 1 July 2020 restated

1,288,287 (33,321) 166,007 1,420,973
Total comprehensive income - 2,264 77,859 80,123
Equity raising 48,737 - - 48,737
Share right issued for employee service 2,795 - - 2,795
Balance as at 31 December 2020 restated

1,339,819 (31,057) 243,866 1,552,628
* Refer to note 12 for details on prior period restatement

The above statement of changes in equity should be read in conjunction with the accompanying notes.

-5-

SkyCity Entertainment Group Limited
Statement of Cash Flows
For the six month period ended 31 December 2021


Unaudited
6 months
31 December
Restated*
Unaudited
6 months
31 December
2021 2020

Notes $'000 $'000
Cash Flows from Operating Activities
Receipts from customers 216,879 313,940
Payments to suppliers and employees (215,699) (187,080)
Government grants 6 17,228 25,709


18,408 152,569
Gaming taxes and levies paid (17,772) (19,530)
Income taxes paid (32,712) (14,548)
Net Cash Inflow/(Outflow) from Operating Activities (32,076) 118,491
Cash Flows from Investing Activities
Disposal of Lets Play Live Media 3,250 -
Capital additions (46,231) (111,340)
Payments for investment property - (283)
Purchased intangible assets (8,449) (5,049)
NZICC fire related income 131,177 533
NZICC fire related costs (58,584) (59,045)
Net Cash Inflow/(Outflow) from Investing Activities

21,163 (175,184)
Cash Flows from Financing Activities
Issue of new share capital - 48,737
Cash flows associated with derivatives 2,893 1,979
New borrowings 108,336 175,141
Repayment of borrowings - (143,500)
Buy back of shares (2,308) -
Interest paid (15,430) (20,692)
Dividends paid to company shareholders 8 (53,082) -
Lease liabilities paid (4,569) (1,119)
Net Cash Inflow from Financing Activities 35,840 60,546
Net Increase in Cash and Bank Balances 24,927 3,853
Cash and bank balances at the beginning of the period 49,940 54,224
Cash and Cash Equivalents at End of the Period 74,867 58,077
* Refer to note 12 for details on prior period restatement

The above statement of cash flows should be read in conjunction with the accompanying notes.

SkyCity Entertainment Group Limited
Notes to the Financial Statements
For the six month period ended 31 December 2021

-6-


1 General Information
SkyCity Entertainment Group Limited (Company) and its subsidiaries (together, SkyCity or the Group) is a limited liability
company incorporated and domiciled in New Zealand.
The interim financial statements of the Group have been prepared in accordance with the requirements of the Financial
Reporting Act 2013, the Companies Act 1993 and the New Zealand Stock Exchange (NZX).
The Company is registered under the Companies Act 1993 and is an FMC Reporting Entity under part 7 of the Financial
Markets Conduct Act 2013. The address of the Company’s registered office is 99 Albert Street, Auckland.
The Company is dual listed on the New Zealand and Australian stock exchanges.
The Company and its subsidiaries (together, SkyCity or the Group) operate in the gaming, entertainment, hotel, convention,
hospitality and tourism sectors. The Group has operations in New Zealand and Australia.
These interim financial statements of the Group for the six months ended 31 December 2021 have been reviewed but have
not been audited. They were approved for issue by the Board of Directors on 11 February 2022.
For the purposes of complying with generally accepted accounting practice in New Zealand (GAAP), the Group is a
for-profit entity.
2 Basis of Preparation
These interim financial statements have been prepared in accordance with GAAP. They comply with New Zealand
equivalent to International Accounting Standard 34 Interim Financial Reporting (NZ IAS 34), International Accounting
Standard (IAS) 34 Interim Financial Reporting, and the New Zealand Stock Exchange Listing Rules.
These interim financial statements do not include all the notes normally included in the annual financial statements.
Accordingly, these interim financial statements should be read in conjunction with the annual report for the year ended 30
June 2021.
Measurement basis
These interim financial statements have been prepared under the historical cost convention, except that certain financial
instruments (including derivative instruments) and investment properties are held at fair value.
Presentation currency
These interim financial statements are presented in New Zealand dollars, which is the Company’s functional currency.
Amounts are rounded to the nearest thousand dollars, unless otherwise stated.
Non-GAAP financial information
The Group’s standard profit measure prepared under GAAP is profit for the period. When discussing financial performance,
the Group also uses non-GAAP financial information, which is not prepared in accordance with NZ GAAP and therefore
may not be compatible to similar financial information presented by other entities. The Directors and Management believe
that this non-GAAP financial information provides useful information to readers of the financial statements to assist in the
understanding of the Group’s financial performance and is consistent with the information used internally to evaluate the
performance of business units.
Definitions of non-GAAP financial information used in these financial statements are:
• EBITDA: Earnings before interest, tax, depreciation, and amortisation; and
• EBIT: Earnings before interest and tax
Critical accounting estimates and judgements
The preparation of interim financial statements requires the use of certain critical accounting estimates and the exercise of
judgement regarding the application of accounting policies.
These interim financial statements are prepared using the same significant judgements and estimates as were used in the
preparation of the 30 June 2021 annual financial statements except as disclosed in note 3 below.

SkyCity Entertainment Group Limited
Notes to the Financial Statements
For the six month period ended 31 December 2021

2 Basis of Preparation (continued)
-7-

As was the case at 30 June 2021, the COVID-19 pandemic continues to create uncertainties that impact the Group’s key
judgements and estimates. For intangible assets, these uncertainties include the ability to meet future forecasts and the
consequential impact on the carrying value of those assets (note 12).
Going concern
For the six months to 31 December 2021, the Group incurred a loss of $33.7 million. This loss arose as a result of the
following trading restrictions imposed by the New Zealand and South Australian Governments in response to the ongoing
COVID-19 pandemic:
• Auckland site: Closure from 17 August 2021 to 2 December 2021 and operation with social distancing restrictions and
reduced venue capacity from 3 December 2021 to 30 December 2021;
• Hamilton site: Closure from 17 August 2021 to 7 September 2021 and from 4 October 2021 to 16 November 2021 and
operation with social distancing restrictions and reduced venue capacity from 8 September 2021 to 3 October 2021
and from 17 November 2021 to 2 December 2021;
• Queenstown site: Closure from 17 August 2021 to 7 September 2021 and operation with social distancing restrictions
from 8 September 2021 to 2 December 2021; and
• Adelaide site: Closure from 20 July 2021 to 27 July 2021 and operation with social distancing restrictions and reduced
venue capacity from 28 July to 31 December 2021.
During the period, the Group received New Zealand Government wage subsidies of $17.2 million during the closure of the
Auckland and Hamilton sites (note 6).
The significant financial impact of these closures and trading restrictions on the Group created the potential for a breach of
financial covenants as at 31 December 2021. To ensure that such a breach would not occur, the Group obtained a waiver
of the gearing ratio (EBITDA/net debt) covenant for the 31 December 2021 testing date and secured an additional tranche
of debt facility prior to the reporting date. Although a waiver was obtained from the Group’s financiers, based on finalised
interim results SkyCity would have been compliant with the debt covenants at 31 December 2021 had the waiver not been
in place.
The Group has also agreed amended financial covenants for the 30 June 2022 testing date with both the United States
Private Placement (USPP) investors and the banking syndicate (note 9).
As referenced in note 16, subsequent to balance date cases of the Omicron variant of COVID-19 were detected in the
community in New Zealand. As a result, the New Zealand Government moved the country to the COVID-19 red traffic light
setting, which imposed restrictions on the Group’s sites, including venue capacity limits, social distancing and
mask-wearing requirements.
At the time of signing these interim financial statements, New Zealand remains at the COVID-19 red traffic light setting.
There is uncertainty as to the length of time that New Zealand will remain at the red traffic light setting, but the New
Zealand Government has indicated this could be several weeks.
SkyCity has prepared forecasts to support its going concern assessment that consider a range of possible scenarios from
operating under the red and orange traffic light settings, potential additional implications from the Omicron variant, and
other considerations as disclosed within the contingent liabilities note (note 14). These forecast scenarios have been
informed by the recent experience of the impact of COVID-19 restrictions in New Zealand and South Australia and assume
that COVID-19 trading restrictions under the red traffic light setting in New Zealand are in place for several weeks.
While there remain uncertainties regarding the implications on the near-term financial performance of the Group, SkyCity’s
current forecast scenarios indicate that it continues to have access to a sufficient level of liquidity to sustain the business
and remain compliant with its financial obligations, including the debt covenant restrictions. These forecast scenarios are
closely monitored and continuously updated as actual performance information becomes available.
The Directors have therefore concluded that there are no material uncertainties related to the Group being a going concern
and accordingly, these interim financial statements are prepared on a going concern basis.
3 Summary of Significant Accounting Policies
In the current period, the Group revised its accounting policy for the configuration and customisation costs associated with
software as a service (SaaS) arrangements. Information on the change made, the reason for the change, and the impacts
of the change, are provided in note 12.

SkyCity Entertainment Group Limited
Notes to the Financial Statements
For the six month period ended 31 December 2021
(continued)

3 Summary of Significant Accounting Policies (continued)
-8-

All other material accounting policies applied in these interim financial statements are consistent with those applied in the
audited financial statements for the year ended 30 June 2021 and the unaudited interim financial statements for the six
months ended 31 December 2020.
4 Segment Information
Accounting policy
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision
maker. The chief operating decision maker has been identified as the Chief Executive Officer (CEO).
Other operations consist of the Group's operations at SkyCity Hamilton, SkyCity Queenstown, SkyCity Wharf, Lets Play
Live Media and SkyCity Online Casino.
Corporate/Group includes head office functions and funding entities and is not considered an operating segment.
Six Months Ended
31 December 2021
SkyCity
Auckland
Other
Operations
SkyCity
Adelaide
International
Business *
Corporate/
Group Total
$'000 $'000 $'000 $'000 $'000 $'000
Gaming revenue 72,650 21,474 65,685 167 - 159,976
Online gaming - 9,317 - - - 9,317
Non-gaming revenue 19,315 3,109 25,101 14 431 47,970
Other income 15,746 3,447 50 - 1,330 20,573
NZICC fire income 52,483 - - - - 52,483
Total revenue 160,194 37,347 90,836 181 1,761 290,319
Expenses (95,843) (17,683) (79,526) (4,537) (9,755) (207,344)
NZICC fire expenses (56,330) - - - - (56,330)
Impairment - (4,390) - - (1,846) (6,236)
Depreciation and amortisation (22,022) (3,074) (16,255) - (6,489) (47,840)
Segment profit/(loss) (EBIT) (14,001) 12,200 (4,945) (4,356) (16,329) (27,431)
Net finance costs (17,169)
Loss before income tax (44,600)

Six Months Ended
31 December 2020 - restated
SkyCity
Auckland
Other
Operations
SkyCity
Adelaide
International
Business *
Corporate/
Group Total
$'000 $'000 $'000 $'000 $'000 $'000
Gaming revenue 159,950 31,965 62,494 3,336 - 257,745
Online gaming - 7,526 - - - 7,526
Non-gaming revenue 37,987 5,168 10,668 - - 53,823
Other Income 9,072 1,371 16,575 - 939 27,957
NZICC fire income 66,770 - - - - 66,770
Sale of Auckland car park concession 39,500 - - - - 39,500
Total revenue 313,279 46,030 89,737 3,336 939 453,321
Shares of net profits/(losses) of associates - - - - - -
Expenses (116,478) (20,625) (67,548) (9,757) (21,787) (236,195)
NZICC fire expenses (66,664) - - - - (66,664)
Depreciation and amortisation (22,934) (2,961) (7,672) - (7,491) (41,058)
Segment profit/(loss) (EBIT) 107,203 22,444 14,517 (6,421) (28,339) 109,404
Net finance costs (14,042)
Profit before income tax 95,362

* International Business gaming revenue includes rebates and complimentary play.

SkyCity Entertainment Group Limited
Notes to the Financial Statements
For the six month period ended 31 December 2021
(continued)

-9-

5 Revenue

6 months
31 December

6 months
31 December
2021 2020

$'000 $'000
Gaming 159,468 254,361
Non-gaming 47,970 53,823
Online gaming 9,317 7,526
Total revenue 216,755 315,710

Gaming revenues represent the net win to the casino from gaming activities, being the difference between amounts
wagered and amounts won by casino patrons. Revenue is recognised at the end of each game. International Business
rebates are treated as a reduction in gaming revenue.
The revenue from the online casino is from New Zealand based players using technology developed by and under a Malta
gaming licence held by Gaming Innovation Group Inc (GIG). SkyCity is not the principal transacting with casino customers.
Revenue is reported net of GIG costs allowable under the arrangement.
Non-gaming revenues include revenues arising from hotels and conventions, food and beverage, Sky Tower, car parking
and other sources. These are recognised when the associated goods or services have been provided.

6 months
31 December
6 months
31 December
2021 2020

Notes $'000 $'000
Reconciliation to the segment note
Total revenue 5 216,755 315,710
Other income 6 3,345 1,142
Government grants 6 17,228 26,815
Liquidated damages 6 - 39,500
NZICC fire income 7 52,483 66,770
Total revenue as per income statement 289,811 449,937
International Business rebates 508 3,384
Total revenue as per segment note 290,319 453,321
6 Other income

6 months
31 December
6 months
31 December
2021 2020

$'000 $'000
Net gain on disposal of property, plant and equipment 555 67
Net gain on sale of Lets Play Live Media 1,779 -
Liquidated damages - 39,500
Government grants 17,228 26,815
Dividend income 2 2
Rental income from investment properties 1,009 1,073


20,573 67,457
Government Grants
Government grants are wage subsidies and business support payments received from the New Zealand and Australian
Governments in relation to the COVID-19 pandemic.

SkyCity Entertainment Group Limited
Notes to the Financial Statements
For the six month period ended 31 December 2021
(continued)

6 Other income (continued)
-10-


Liquidated Damages
Included within the contracts with The Fletcher Construction Company Limited ("FCC or the Contractor") for the
construction of the New Zealand International Convention Centre (NZICC) and Horizon Hotel is the right to liquidated
damages if certain milestones are not met. To 30 June 2020, SkyCity withheld $39.5 million from payments to FCC (which
were disclosed as a contingent asset). As part of a settlement agreement signed on 30 November 2020, FCC agreed to not
challenge retention of that amount, and accordingly $39.5 million was recognised as other income in the prior financial
period.
7 NZICC Fire
On 22 October 2019, there was a significant fire at the NZICC construction site which caused extensive damage to the
NZICC and also damaged Horizon Hotel which is being constructed on the adjacent site.
Both NZICC and Horizon Hotel are insured, and the insurers have acknowledged the fire event and confirmed that
SkyCity's contract works policy will respond in relation to damage caused by the fire. Any costs not covered by insurance
are expected to be incurred by or sought from FCC which is the contractor constructing both buildings.
In accounting for the impact of the fire, a number of significant judgements and estimates have been made. Consistent with
the position at 30 June 2021, the most significant assumptions, and associated risk to the estimates provided, relate to the
extent of the damage of the NZICC building, the uncertain costs to remediate, the percentage of contingency included in
the estimates and the timeline for remediation. These judgements and estimates will continue to be reviewed as new
information becomes available. It is possible that the actual financial impacts of the fire will differ from those included in
these interim financial statements, those differences may be material. Details of further judgements and estimates made
are provided throughout this note.
a Income

6 months
31 December
6 months
31 December
2021 2020

$'000 $'000
Contract works insurance reinstatement recovery - 6,000
Other recoveries 52,483 60,770
52,483 66,770
Contracts Work Insurance Recovery for Reinstatement works
The accounting treatment of the insurance recovery for the damage is dependent on the relationship between SkyCity, the
insurers and the Contractor. It is the Group's view, supported by legal advice, that SkyCity is the principal in the insurance
relationship and therefore receives, and has control over, all insurance proceeds. As a result of this relationship, the Group
recognises the expected insurance proceeds for reconstruction of the fire damage as income and a receivable.
While the insurers have confirmed that SkyCity's contracts works policy will respond in relation to the damage caused by
the fire, the final insurance recovery for the reinstatement costs will be dependent on the final view of the insurer as the
claims are presented. The damage assessment and reconstruction scope process is still underway by the Contractor and
no complete reconstruction cost or damage estimates have been confirmed at this stage.
At 30 June 2021, the insurance recovery for the NZICC and Horizon Hotel reconstruction costs was estimated to be
between $379.6 million and $471.0 million and the Group assumed that the insurance recovery would be at the lower end
of the range (i.e. $379.6 million). That estimate was based on assessments performed by an independent expert, Rider
Levett Bucknall Auckland Limited (RLB), adjusted by the Group as outlined in the 30 June 2021 annual financial
statements. The Group considers recovery of the amount to be virtually certain. Since 30 June 2021, no material
information has arisen that requires a change to that estimate. Consequently, at 31 December 2021, the insurance
recovery for the NZICC and Horizon Hotel reconstruction costs is estimated to be $379.6 million and no contract works
insurance recovery income has been recognised in the six months to 31 December 2021.

SkyCity Entertainment Group Limited
Notes to the Financial Statements
For the six month period ended 31 December 2021
(continued)

7 NZICC Fire (continued)
a Income (continued)
-11-

These estimates are highly sensitive to the actual extent of damage and the ultimate insurance recovery may differ,
potentially materially, from the current assessment.

Other Recoveries
In addition to recovery of the expected reconstruction costs, the Group seeks recovery of additional items, which are
recognised as other recoveries when they are incurred, and payment is considered virtually certain. These costs primarily
relate to site preparation, demolition and clearing, but also include:
• business interruption costs and lost gross profit while the Auckland precinct was closed or affected by the fire;
• payments required to be made by SkyCity to now MPF Parking Limited (Macquarie) under the Auckland Car Park
Concession Agreement (for lack of access to the NZICC car parks due to the fire damage);
• costs of professional advisers assisting the Group as a result of the fire;
• insurance premiums and other project costs for additional periods due to construction delays; and
• additional ongoing costs as a result of the fire.
In the current period recovery of costs incurred of $52.5 million (1H21: $60.8 million) has been assessed to be virtually
certain with the recovery of $39.3 million (FY21: $23.3 million) assessed as probable and therefore disclosed as a
contingent asset (note 14). The assessment of recoverability of these costs as virtually certain or probable is a key
judgement and for some of these costs the judgement is supported by legal advice received by the Group.
Initial recovery for these additional items will be sought from insurers where appropriate. Where recovery under the Group’s
insurance policies is not available, recovery will be sought from the Contractor.
b Expenses


6 months
31 December
6 months
31 December
2021 2020

$'000 $'000
Write-off of NZICC and Horizon Hotel capitalised work-in-progress - 13,783
Release from Deferred Licence Value liability - 5,024
NZICC obligation - (8,984)
Site preparation, demolition and other costs 56,330 56,841
56,330 66,664
Write-off of NZICC and Horizon Hotel Capitalised Work-in-Progress
The fire is accounted for as the disposal of the damaged asset and the purchase of new, or part replacement of repaired,
component parts. As a result, the carrying value of the damaged/destroyed parts of the NZICC and Horizon Hotel are
expensed. As the investigation of the extent of damage continues, more damaged components may be identified and
written off.
No material information has arisen in the six months to 31 December 2021 to indicate a change to the extent of damage
previously estimated by RLB in June 2021 - accordingly the Group has estimated that approximately 55% (30 June 2021:
55%) of the NZICC and 13% (30 June 2021: 13%) of the Horizon Hotel construction work to date has been destroyed and
will need to be replaced or repaired. As a result, to date approximately $228.6 million of costs previously capitalised as
work in progress in property, plant and equipment have been written off.
This estimate is highly sensitive to the actual extent of damage and the ultimate write off may differ materially once the full
damage assessment to both buildings has been completed.

SkyCity Entertainment Group Limited
Notes to the Financial Statements
For the six month period ended 31 December 2021
(continued)

7 NZICC Fire (continued)
b Expenses (continued)
-12-

Costs (external and internal) relating to the replacement of the derecognised asset components are being capitalised as
incurred as a new asset. $37.4m of costs were capitalised during the current period (1H21 $0). The apportionment of costs
between capitalisation and expense is a key judgement.

Release from Deferred Licence Value Liability
In 2016, SkyCity accounted for the granting of the NZICC Auckland casino licence enhancements and recognised a
deferred licence value liability of $405.0 million. Based on the Group’s accounting policy, this amount was to be accounted
for as a reduction in the carrying value of the NZICC upon completion.
The deferred licence value would normally be allocated against each component asset of the NZICC upon completion, and
therefore when derecognising some components (as detailed above) there is also a requirement under the Group’s
accounting policy to release a portion of the deferred licence value liability. As no additional capitalised work in progress
has been written off in the current period, no further release from the deferred licence value liability has occurred in the
current period and the total amount released remains at the same level as at 30 June 2021 ($173.3 million).
The ultimate transfer of the deferred licence value liability is highly sensitive to the actual extent of damage and may differ
from this assessment once further assessment of the damage to NZICC has been completed. As a result, it is possible the
amount of the deferred licence value liability transferred may change materially.
NZICC Obligation
The Group has recognised a liability to reconstruct the assets associated with the initial 600 NZICC car parks that are
required to be provided to Macquarie under the Auckland Car Park Concession Agreement. No material information has
arisen in the six months to 31 December 2021 to indicate a change to the estimate prepared by RLB in June 2021 and
accordingly this liability remains at the same level as at 30 June 2021 ($36.5 million).
The ultimate cost for reconstructing these assets may differ materially from this assessment once detailed planning and
construction is completed and the actual extent of the damage is known.
Site Preparation, Demolition and Other Costs
These costs primarily relate to site preparation and clearing costs on charged by the Contractor and some costs incurred
directly by SkyCity. These costs are generally recoverable from the insurers. To the extent that recovery of these costs is
considered virtually certain, a matching amount is included in NZICC fire income above.
c Current Assets
31 December 30 June
2021 2021

$'000 $'000

Insurance recoveries for damages to the NZICC and Horizon Hotel 380,302 380,302
Other recoveries 217,066 164,583
Payments received from the insurers (267,709) (136,533)
Transfer to non-current receivables (refer note 7(d)) (181,000) (233,000)
148,659 175,352
In addition to the $148.7 million of current NZICC recoveries, there are also non-current recoveries of $181.0 million (refer
below). NZICC recoveries (current plus non-current) total $329.7 million.
Insurance Recovery for Damage to the NZICC and Horizon Hotel
Insurance recoveries to cover the reinstatement to the pre fire condition include amounts related to the damage to the
NZICC $365.0 million (30 June 2021: $365.0 million), Horizon Hotel $14.6 million (30 June 2021: $14.6 million) and various
ICT equipment $0.7 million (30 June 2021: $0.7 million).

SkyCity Entertainment Group Limited
Notes to the Financial Statements
For the six month period ended 31 December 2021
(continued)

7 NZICC Fire (continued)
c Current Assets (continued)
-13-


Other Recoveries
These recoveries primarily relate to site preparation, demolition and clearing costs incurred and on-charged by the
Contractor (note 7a). The Group believes that recovery of this amount is virtually certain.
Payments Received from the Insurers
To date the Group has received payment from the insurers of $265.5m million (2021 $135.5 million) towards site
preparation, clearing costs, the cost of remediation and SkyCity costs.
The Group has also received $2.2 million (2021 $1.0 million) from insurers towards its business interruption claim.
d Non-current Assets
31 December 30 June
2021 2021

$'000 $'000
Insurance recoveries for damages to the NZICC and Horizon Hotel 181,000 233,000
181,000 233,000
The split between current and non-current is based on estimated cash flows associated with the anticipated timing of the
reconstruction.
8 Dividends

6 months
31 December
6 months
31 December
2021 2020

$'000 $'000
Prior year's final dividend 53,082 -
Total dividends provided for or paid 53,082 -
Cents per share
Prior year's final dividend 7.0¢ - ¢

9 Non-Current Liabilities - Interest Bearing Liabilities
31 December 30 June
2021 2021

$'000 $'000
Car park concession (main site nested car parks) 48,003 47,167
USPP notes 221,046 221,811
Syndicated bank facility 156,367 -
New Zealand bonds 175,000 175,000
Deferred funding expenses (3,015) (3,014)
Total non-current liabilities - interest bearing liabilities 597,401 440,964

SkyCity Entertainment Group Limited
Notes to the Financial Statements
For the six month period ended 31 December 2021
(continued)

9 Non-Current Liabilities - Interest Bearing Liabilities (continued)
-14-

(a) USPP Notes
The USPP fixed rate US dollar borrowings have been hedged and converted to New Zealand dollar floating rate borrowings
by using cross-currency interest rate swaps to eliminate foreign exchange exposure to the US dollar within the Income
Statement.
USPP notes mature March 2025 (US$100 million) and March 2028 (A$65 million).
The movement in the amount of the USPP notes from 30 June 2021 relates to foreign exchange and interest rate
movements.
(b) Syndicated Bank Facility
The syndicated banking facility is provided by ANZ (New Zealand and Australia), Commonwealth Bank of Australia, Bank
of New Zealand, National Australia Bank and Westpac (New Zealand and Australia).
As at 31 December 2021, SkyCity had in place revolving credit facilities of:
• A$100.0 million maturing 15 June 2023 (partially drawn at the reporting date);
• NZ$50.0 million maturing 30 November 2022 (undrawn at the reporting date);
• NZ$115.0 million maturing 15 June 2024 (partially drawn at the reporting date); and
• NZ$115.0 million maturing 15 June 2025 (undrawn at the reporting date).
A total of $156.4 million was drawn at 31 December 2021 (31 December 2020: $175.1 million; 30 June 2021: $48.0
million).
(c) Auckland Car Park Concession Agreement - financing element
As detailed in the 30 June 2021 financial statements, a portion of the sale of the Auckland Car Park Concession relates to
450 car parks for the exclusive use of SkyCity. This portion is treated as an interest-bearing financial liability.

The $220 million concession payment has been allocated between these 450 nested car parks and the unnested remaining
car parks based on their respective fair values. At 19 August 2019, $45.8 million was allocated to these nested car parks
and was recognised as the initial financial liability.

From that date, interest expense has been recognised as an addition to this liability on a yield to maturity basis and
payments for the use of the nested car parks have been deducted. The residual value of the financial liability will be nil on
the maturity of the car park concession contract.
(d) New Zealand Bonds
$175 million of six year unsubordinated, unsecured redeemable fixed rate bonds were issued on 21 May 2021.
(e) Debt Covenants
As at 31 December 2021, SkyCity had agreed with lenders, a waiver of the Gearing Ratio covenant due to the impact of
COVID-19 during the reporting period. Although a waiver was obtained, SkyCity would have been compliant had the waiver
not been in place. SkyCity was also in compliance with all other debt covenants. The EBITDA-based covenants (Gearing
Ratio and Interest Cover Ratio) are next tested on 30 June 2022. Amendments to these covenants as at 30 June 2022
have also been agreed with lenders and provide SkyCity greater flexibility.

SkyCity Entertainment Group Limited
Notes to the Financial Statements
For the six month period ended 31 December 2021
(continued)

-15-

10 Current Liabilities - Interest Bearing Liabilities
31 December 30 June
2021 2021

$'000 $'000
Syndicated bank facility - 48,031
Total current interest bearing borrowings - 48,031
11 Income Tax (Benefit)/Expense

6 months
31 December
Restated*
6 months
31 December
2021 2020

$'000 $'000
(Loss)/Profit before tax (44,600) 95,362

Income tax @ 28% (12,488) 26,701
Expenses not deductible for tax purposes (625) 1,815
Foreign exchange variances - (95)
Differences in overseas tax rates (1,929) 445
Assets held for sale (17) -
Prior period adjustments 212 (26)
NZICC fire capital (income)/expenses 1,077 (292)
Non-assessable gain on sale (498) -
Impairment adjustments 1,746 -
Non-taxable settlement amount - (11,060)
Controlled foreign company regime 1,632 -
Other 8 15
Tax (benefit)/expense (10,882) 17,503


The weighted average applicable tax rate was 24.4% (2021: 19.3%, 1H21: 18.5%). The weighted average tax rate has
been significantly impacted by:

• NZICC fire capital income/expense;

• impairment adjustments;

• fair value adjustments;

• sale of Lets Play Live Media Limited; and

• non-taxable settlement amount.

Excluding these items the weighted average tax rate would have been 30.1% (2021: 28.7%, 1H21: 29.5%).

SkyCity Entertainment Group Limited
Notes to the Financial Statements
For the six month period ended 31 December 2021
(continued)

-16-

12 Non-current Assets - Intangible assets
Goodwill
Casino
licences
Computer
software
Gaming
Entitlements Total

$'000 $'000 $'000 $'000 $'000
At 1 July 2021 - restated
Cost 35,786 778,303 135,611 1,823 951,523
Accumulated amortisation - (228,642) (95,743) (73) (324,458)
Net book amount 35,786 549,661 39,868 1,750 627,065
Movements in the Six-month Period Ended 31
December 2021

Exchange differences - (1,667) (90) (21) (1,778)
Additions - - 6,606 - 6,606
Impairment charge - (4,391) - - (4,391)
Amortisation charge - (1,288) (5,029) (61) (6,378)
Closing net book amount 35,786 542,315 41,355 1,668 621,124
At 31 December 2021
Cost 35,786 769,566 141,198 1,802 948,352
Accumulated amortisation - (227,251) (99,843) (134) (327,228)
Net book amount 35,786 542,315 41,355 1,668 621,124


At 1 July 2020 - restated
Cost 37,694 777,118 126,142 - 940,954
Accumulated amortisation - (225,281) (85,081) - (310,362)
Net book amount 37,694 551,837 41,061 - 630,592
Movements in the Year Ended 30 June 2021
-
Exchange differences - 453 9 - 462
Additions - - 5,660 - 5,660
Adelaide expansion - - 5,538 3,088 8,626
Transfer of Adelaide deferred licence - - (1,677) (1,265) (2,942)
Assets classified as held for sale (1,908) - (20) - (1,928)
Amortisation charge - (2,629) (10,703) (73) (13,405)
Closing net book amount 35,786 549,661 39,868 1,750 627,065
At 30 June 2021 - restated
Cost 35,786 778,303 135,611 1,823 951,523
Accumulated amortisation and impairment - (228,642) (95,743) (73) (324,458)
Net book amount 35,786 549,661 39,868 1,750 627,065
The Queenstown Wharf Casino remains closed and Management does not envisage reopening it in the foreseeable future.
As a result, the Queenstown Wharf casino licence, which was held at $4.4m, was fully impaired in the current period.
Due to the ongoing uncertainties associated with the COVID-19 pandemic, the Auckland, Hamilton and Adelaide casino
licences and goodwill were also tested for impairment. As was the case at 30 June 2021, the calculated values in use of
the Auckland casino licence and Hamilton goodwill continue to significantly exceed their carrying values.

SkyCity Entertainment Group Limited
Notes to the Financial Statements
For the six month period ended 31 December 2021
(continued)

12 Non-current Assets - Intangible assets (continued)
-17-

Reduced earnings estimates for the Adelaide casino cash generating unit (CGU), resulting from a combination of changed
consumer behaviour due to the impacts of the COVID-19 pandemic in South Australia, extended regulatory restrictions
imposed on businesses due to COVID-19 and the estimated impact of enhancing the Adelaide Anti Money Laundering
Enhancement Program (note 14), resulted in a reduction in the recoverable amount of the CGU. This meant that the
mid-point of the valuation range for the CGU fell below the carrying value of the CGU, although the carrying value remains
within the valuation range for the CGU. The valuation of the CGU is highly sensitive to changes in earnings estimates. The
unknown future impact of COVID-19, and customer responses to enhancements in the AML/CTF Program, create a
heightened level of uncertainty that makes forecasting challenging. Small changes in assumptions could lead to an
increase in, or a reversal of, impairment of the CGU. Given these uncertainties, Management determined that the current
period valuation did not warrant an increase in, or a reversal of, the impairment recognised in FY20 on the Adelaide casino
licence of A$150 million.

(a) Software as a Service arrangement
In March 2021, the IFRS Interpretations Committee (Committee), which is responsible for interpreting the application of
IFRS, issued an agenda decision that the costs incurred in configuring and customising software provided under software
as a service arrangements (SaaS) must be expensed unless they:
• create an intangible asset, separate from the software, that the customer controls; or
• are paid to the supplier of the cloud-based software for significant customisation work (in which case the costs are
recorded as a prepayment for services and amortised over the expected term of the SaaS arrangement).
The Committee’s agenda decision was ratified by the International Accounting Standards Board in April 2021.
As a result of the Committee’s decision, during the year the Group revised its accounting policy in relation to configuration
and customisation costs incurred in implementing SaaS arrangements. Until the current period, the Group’s accounting
policy has been to capitalise the costs of configuring and customising SaaS arrangements as intangible assets. The
revised policy is that such costs are expensed as incurred, unless the requirements for capitalisation established by the
Committee’s decision are met.
This change in accounting policy has been implemented retrospectively, by restating the opening equity position (as at 1
July 2020) and the comparative financial statements. To determine the level of restatement required, the Group identified
all SaaS arrangements for which configuration and customisation costs had been capitalised, but not fully amortised at 1
July 2020, to determine which no longer met the requirements for capitalisation under the Group’s revised accounting
policy. Those assets that did not meet the requirements for capitalisation under the Group’s revised accounting policy were
derecognised.
The impact of this change in accounting policy is presented in the tables below.
The primary impacts of the change in accounting policy are:
• a net reduction in intangible assets of $18.9 million at 1 July 2020 and $19.3 million at 30 June 2021;
• a net decrease in profit after income tax of $0.6 million at 31 December 2020; and
• a decrease in net operating cash inflows of $2.1 million at 31 December 2020 (offset by an equal decrease in net
investing cash outflows at the same date).
Statement of financial position Previously
reported
Adjustment Restated
Balances as at 1 July 2020 $'000 $'000 $'000
Intangible assets 649,531 (18,939) 630,592
Deferred tax asset 6,877 33 6,910
Deferred tax liability (45,175) 5,272 (39,903)
Net assets 1,434,607 (13,634) 1,420,973

Retained earnings 179,641 (13,634) 166,007
Total equity 1,434,607 (13,634) 1,420,973

SkyCity Entertainment Group Limited
Notes to the Financial Statements
For the six month period ended 31 December 2021
(continued)

12 Non-current Assets - Intangible assets (continued)
-18-


Income statement Previously
reported
Adjustment Restated
Balances as at 31 December 2020 $'000 $'000 $'000
Total expenses (230,687) (2,125) (232,812)
Depreciation and amortisation (41,797) 1,313 (40,484)
Profit before income tax 96,173 (811) 95,362
Income tax expense (17,757) 254 (17,503)
Profit after income tax 78,416 (557) 77,859


Statement of financial position Previously
reported
Adjustment
1 July 2020
Adjustment
30 June 2021
Restated
Balances as at 30 June 2021 $'000 $'000 $'000 $'000
Intangible assets 646,326 (18,939) (322) 627,065
Deferred tax asset 9,344 33 363 9,740
Deferred tax liability (57,031) 5,272 (216) (51,975)
Deferred licence value - current (1,963) - (125) (2,088)
Net assets 1,651,018 (13,634) (300) 1,637,084

Retained earnings 335,767 (13,634) (293) 321,840
Reserves (22,972) - (7) (22,979)
Total equity 1,651,018 (13,634) (300) 1,637,084


Statement of cash flows Previously
reported
Adjustment Restated
Balances as at 31 December 2020 $'000 $'000 $'000

Payments to suppliers and employees (184,955) (2,125) (187,080)
Net cash inflow from operating activities 120,616 (2,125) 118,491

Purchased intangible assets (7,174) 2,125 (5,049)
Net cash outflow from investing activities (177,309) 2,125 (175,184)

In the current period, if the previous policy had been retained, $0.3 million of software configuration and customisation
costs would have been capitalised to intangible assets and $1.2 million of amortisation would have been expensed.
However, under the new accounting policy the $0.3 million of configuration and customisation costs were expensed as
incurred and amortisation on assets previously capitalised not recognised, as those assets had been derecognised at the
beginning of the current period (i.e. 1 July 2021). As a result of this change in policy, income tax benefit has decreased and
deferred tax liability increased by $0.3 million respectively and loss for the period decreased by $0.7 million.

SkyCity Entertainment Group Limited
Notes to the Financial Statements
For the six month period ended 31 December 2021
(continued)

-19-

13 Assets Classified as Held for Sale
31 December 30 June


2021

2021


$'000

$'000
Land 24,109 8,965
Buildings 2,062 2,359
Plant and equipment 3 265
Goodwill - 1,928
Total 26,174 13,517
Assets held for sale include certain land in Queenstown and the Little Mindil site in Darwin (2021: Darwin Little Mindil site
and Lets Play Live Media).
During the current period, the sale of Lets Play Live Media, which was classified as held for sale at 30 June 2021, was
completed and a gain on sale of $1.8 million was recognised as other income (note 6). The consideration received for the
sale included $2.0 million of convertible notes issued by the acquirer, which are recognised as other non-current assets.
The Queenstown land has been classified as held for sale in the current period and has been written down to fair value less
the costs of disposal, which has resulted in an impairment loss of $1.8 million being recognised in the income statement.
Fair value was measured on a comparable sales basis.
14 Contingencies
(a) Contingent Liabilities

Car parks
SkyCity has obligations under a concession agreement (Concession Agreement) with (now) MPF Parking Limited
(Macquarie) pursuant to which SkyCity granted a long term concession over certain SkyCity car parks in Auckland to
Macquarie. SkyCity is required to make payments to Macquarie for car parks that are unavailable under the Concession
Agreement as a result of the NZICC fire. Dependent on the timeframe in which the NZICC car parks are made available to
Macquarie, Macquarie may have the option to terminate the Concession Agreement. In the event such a right crystalises
and Macquarie chooses to exercise such a right in lieu of other protections within the Concession Agreement, this would
result in SkyCity taking back ownership of the concession car parks in return for a payment based on a determination of the
market value of the car parks taking into account certain assumptions. SkyCity is engaging with Macquarie on this issue
and to date Macquarie has not indicated it intends to exercise such option but should it do so recovery of additional costs or
losses incurred by SkyCity resulting from the impact of the NZICC fire may be sought from the NZICC Contractor.
Regulators
SkyCity operates in an industry with a complex regulatory framework. During FY21, there was heightened focus from a
range of regulators across New Zealand and in particular Australia. SkyCity takes its obligations seriously and continues to
work proactively with its regulators and respond to their inquiries.
On 4 June 2021, SkyCity Adelaide Pty Ltd was notified by the Australian Transaction Reports and Analysis Centre’s
(AUSTRAC) Regulatory Operations Team that it had identified potential serious non compliance by SkyCity Adelaide Pty
Ltd with the Australian Anti Money Laundering and Counter Terrorism Financing Act 2006 and Anti Money Laundering and
Counter Terrorism Financing Rules Instrument 2007 (No.1) (AML/CTF). The Regulatory Operations Team had therefore
referred the matter to AUSTRAC's Enforcement Team, which initiated a formal enforcement investigation into the
compliance of SkyCity Adelaide Pty Ltd.
The potential serious non compliance noted by AUSTRAC includes concerns relating to ongoing customer due diligence,
adopting and maintaining an AML/CTF Program and compliance with Part A of an AML/CTF Program. These concerns
were identified in the course of a compliance assessment which AUSTRAC commenced in September 2019, focusing on
SkyCity Adelaide Pty Ltd's management of customers identified as high risk and politically exposed persons for the periods
of 1 July 2015 to 30 June 2016 and 1 July 2018 to 30 June 2019.

SkyCity Entertainment Group Limited
Notes to the Financial Statements
For the six month period ended 31 December 2021
(continued)

14 Contingencies (continued)
-20-


AUSTRAC has made clear that it has not made a decision regarding the appropriate regulatory response that it may apply
to SkyCity Adelaide Pty Ltd, including whether or not enforcement action will be taken. If any civil penalty action is taken,
this could result in a financial penalty, however SkyCity Adelaide Pty Ltd considers that it is not yet possible to reliably
estimate a potential financial penalty and accordingly no provision has been raised in respect of these matters. SkyCity
Adelaide Pty Ltd regards the matters raised by AUSTRAC with the utmost seriousness and has appointed an independent
expert to conduct a comprehensive review of its AML/CTF Program and broader AML function which, together with SkyCity
Adelaide Pty Ltd’s own internal review, is aimed at putting in place a comprehensive enhancement programme to address
issues in, and improve more generally, the quality of its AML/CTF Program and AML function.
Judgments in civil penalty proceedings brought by AUSTRAC to date demonstrate that the Federal Court’s determination of
the appropriate penalty (where contraventions are admitted or established) is very specific to the facts in each case. The
Court will have regard to all relevant matters in determining an appropriate penalty, including the nature and extent of any
contravention(s), loss and damage suffered as a result of any contravention(s), steps taken to improve existing systems,
and relative size and financial position of the business.
(b) Contingent Assets
As detailed in note 7, the Group intends to seek recovery from the Contractor (FCC) for additional costs and losses
associated with the NZICC fire that are not covered by the insurers. These include insurance excesses, payments to
Macquarie under the Concession Agreement, additional project costs, and other items. The Group has identified $39.3
million (2021 FY: $23.3 million) of costs incurred to date where it does not believe that recovery is virtually certain at this
time given the position currently being taken by the Contractor and by the insurer and therefore no income has been
recognised. However, recovery of these costs is considered probable, and they are therefore included as a contingent
asset. This is not the full extent of the costs and losses that have been incurred and that could be claimed from the
Contractor relating to the fire and construction delays.
There are no other contingent assets at 31 December 2021 (30 June 2021: nil).
15 Commitments
Capital Commitments
Capital expenditure contracted for at the reporting date but not recognised as liabilities is as follows:

31 December 30 June
2021 2021

$'000 $'000
Property, plant and equipment 445,673 445,269
445,673 445,269
The above commitments include the estimated cost of reinstating the NZICC and Horizon Hotel. The cost of reinstating the
damage to the NZICC and Horizon Hotel arising from the NZICC fire is currently estimated to be $365.0 million to $450.0
million for the NZICC and $14.6 million to $21.0 million for the Horizon Hotel. The actual costs may be materially different to
these estimates. Further information is included in note 7.

SkyCity Entertainment Group Limited
Notes to the Financial Statements
For the six month period ended 31 December 2021
(continued)

15 Commitments (continued)
-21-


Investment
In December 2021, SkyCity signed a binding term sheet to subscribe for €25 million of new equity in GiG to support the
funding of GiG’s acquisition of France-Pari/Sportnco (Sportnco). GiG is a European-based online gaming platform provider
and media services operator (listed on the Oslo and Stockholm stock exchanges). SkyCity has an existing strategic
partnership with GiG (see note 5) but does not currently have an equity interest in GiG. Sportnco is a European-based
business-to-business online sports and player account management provider, licensed in regulated and high-growth
markets globally.

Settlement of this agreement will result in SkyCity becoming GiG’s largest standalone shareholder (with around 11% of
issued capital) and in a SkyCity representative joining the GiG Board (subject to Board nomination and shareholder
approval). Settlement is conditional on approval of the transaction by GiG’s shareholders and completion of the Sportnco
acquisition.

SkyCity intends to fund the investment from a combination of the sale of non-core assets and existing debt facilities.
Settlement is expected to occur during the first quarter of the 2022 calendar year.
16 Events Occurring after the Balance Sheet Date
COVID-19
On 24 January 2022, cases of the Omicron variant of COVID-19 were detected in the community in New Zealand. As a
result, the New Zealand Government moved the country to the COVID-19 red traffic light setting, which imposed restrictions
on the Group’s sites, including venue capacity limits, social distancing, and mask-wearing requirements. At the time of
signing these interim financial statements, New Zealand remains at the COVID-19 red traffic light setting. There is
uncertainty as to the length of time that New Zealand will remain at the red traffic light setting, but the New Zealand
Government has indicated this could be several weeks. These developments are further detailed in note 2.