Airport July

Cairns Airport were later than usual with their monthly numbers. July is typically the peak month for the year for domestic.

Domestic passengers increased 2.7% compared to the previous year. This was due to an additional 10,000 passengers (+3.2%) travelling on the combined Brisbane, Sydney and Melbourne routes. A total of 325,000 passengers flew on these three routes in July. All other routes were stable with a 0.3% passenger increase.

No mention of those school holidays this month. However growth in the 12 month moving average for domestic has been slowed somewhat in 2017 with some bumpy monthly volatility after peaking at 5.7% last October.

Airport July

International growth remained solid at 9.8% in July. Positive results for Japan and Singapore routes reported. Negative news on changes to Philippines flights from December. August is typically peak month for international passengers.

Source: Cairns Airport

Advertisements

Reef Spins Result

Something is spinning at Reef Casino but I’m not sure it’s either the roulette wheel or the pokies. The poor half year result announced today has been well flagged at the previous distribution announcement and AGM.

Trading and operating conditions
 The Chinese New Year season was soft for Cairns as a whole
 Our complex faced strong local electronic gaming competition
 Tourism into Cairns was generally softer
 Premium gaming was subdued with less than hoped for volume because of the arrests of marketing staff in China from another Australian casino operator which had a consequential impact on our own premium market.

The issue of the Crown Casino arrests in China a while ago now and premium gaming is a bit curious. Reef really doesn’t play in the genuine high roller market which they have previously acknowledged with lower bet limits to manage risk. Reef is the only listed casino operator which doesn’t provide ‘normalised’ results to adjust for variation from theoretical premium win rates. The reason given in a previous query is that it isn’t material.

Pokie numbers in Cairns Regional Council have increased over the last few years from 1,641 back in 2014 up to 1,809 in July this year. That is down from a 2016 peak presumably related to the Courthouse Hotel closure. Applications for expansion of hours have also been noted at suburban venues.

However a more interesting announcement from Reef today could be this:

Reef Corporate Services Limited ABN 66 057 599 621, in its capacity as responsible entity of the Reef Casino Trust ARSN 093 156 293 (RCT), has been advised that Casinos Austria AG (CASAG), a major RCT unitholder, has commenced a strategic review process which could result in the potential sale of its international casino portfolio including its interests in RCT (Process). RCT understands that the Process is currently at a preliminary stage. RCT will keep unitholders informed, based on information it receives. In the meantime, it’s business as usual for RCT.