Wednesday, October 25, 2006

Four months into the financial year, Sky City Entertainment Group has
forecast flat profits in FY07. The projected profit range of $100-$110
million, essentially flat on the 2006 results, has been affected by weaker
trading conditions, gambling losses and a stronger New Zealand dollar
affecting tax payments. Weaker trading conditions have dragged revenues down
at the Auckland gaming and entertainment complex. The Auckland casino has
also been unlucky on VIP commission table games. The year to date, after
tax results from these games is $9.1 million below what would normally be
expected. The recent strengthening of the New Zealand dollar against the
Australian dollar has the potential, if sustained, to increase the company's
base tax rate for FY07 by up to two percentage points. The projected profit
range for FY07 assumes that a 30 percent tax rate will apply and that VIP
commission play outcomes will return to normal patterns.