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Analysts Cut Sky City's Forecast

17 March 2004

NEW ZEALAND – As reported by the Bloomberg: "Sky City Entertainment Group Ltd., New Zealand's biggest casino operator, will keep expanding in Australia, said Chief Executive Evan Davies. Nine out of 10 analysts have cut forecasts because the overseas push is holding back profit growth.

"Davies, 44, who last month agreed to pay A$195 million ($147 million) for MGM Mirage's Darwin casino, said in an interview that Australia is a `logical place to expand' after New Zealand halted new casino licenses.

"…The analysts reduced their earnings forecasts after Sky City said Feb. 27 that first-half profit rose 4 percent, dragged down by a decline in earnings at Adelaide. Sky City gets 87 percent of earnings from its Auckland casino and investors such as Rickey Ward want it to quit expanding to focus on that business.

"…Shares in Sky City had their biggest one-day slump in 11 months after the company released first-half results. The stock has fallen 5.2 percent this year, lagging a 2.2 percent gain by the benchmark NZSX50 index…"

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