SkyCity Entertainment Group announced early Monday that it expects to take an impairment charge of AU$86.2 million (US$57.5 million) on its Australian integrated resort assets at SkyCity Adelaide. This write-down reflects assumptions related to the introduction of mandatory card gaming at SkyCity Adelaide Casino in 2026, as well as additional legal and compliance costs related to SkyCity Adelaide’s modernisation programs.

The company also expects to incur a tax adjustment of NZ$129.6 million (US$78.4 million) due to recent changes to New Zealand tax legislation, which no longer allows owners to depreciate commercial buildings with an estimated useful life of 50 years or more.

Both the impairment and the tax adjustment are non-cash, SkyCity said, and will have no impact on the group’s underlying EBITDA or net profit after tax for the financial year ending 30 June 2024.

Despite the disruption, SkyCity stated that it remains committed to introducing card-based gaming across all its casinos as this will significantly increase transparency and control over customer gaming behaviour and simplify many parts of the current anti-money laundering, anti-terrorist financing and host responsibility measures.

The company, which recently reached a AU$67 million (US$40.5 million) settlement with AUSTRAC in connection with breaches of the Anti-Money Laundering and Terrorist Financing Act 2006added that the key objective over the coming years is to ensure SkyCity has strong risk management systems in place, develops a corporate culture that puts compliance with SkyCity’s commitments and customer care first, and is a company that is viewed as a good corporate citizen and deserving of its casino licenses.

“The impairment is a non-cash accounting adjustment at the balance sheet date. SkyCity Adelaide remains a strategically important asset within the larger SkyCity group,” said SkyCity CEO Jason Walbridge.

The adjustment, related to a change in New Zealand tax legislation, will result in an increase in SkyCity Group’s deferred tax liabilities of NZ$129.6 million and a corresponding one-off charge to tax expense of NZ$129.6 million as the tax base (from a depreciation perspective) of its New Zealand buildings will effectively be reduced to zero, SkyCity said.

In other positive news, the company announced in a separate announcement on Monday that it has entered into agreements to provide credit facilities totalling NZ$465 million (US$281 million) with terms of three, four and seven years, using a combination of its United States Private Placement (USPP) program and its syndicated revolving credit facility.

The transactions will ensure that SkyCity has no debt maturing before May 2027 and that there will then be a “balanced distribution” of debt maturities between financial years 27 and 31.

“We are very pleased to have completed these important financing extensions and would like to thank both our banking syndicate and the USPP lenders for their continued support,” said Walbridge. “This important refinancing allows us to continue to focus on our business transformation programs and the opportunities ahead of us.”