Operator News
Australia – Closures saw Crown Resorts fall by 31.3 per cent
By Phil - 31 August 2021
Australian casino giant Crown Resorts saw its full-year revenues impacted by 31.3 per cent due to the unstable COVID operating environment with the year bringing in revenue of $1,536.8m.
Crown Melbourne faced significant disruption, with gaming operations closed for 160 days, resulting in revenue of $582.5m down 60.6 per cent on the prior comparable period. At Crown Perth revenue came in at $742.8n, up 21.1 per cent.
Following year-end, Crown reached agreement with its relationship banks regarding a series of modifications to Crown’s financing arrangements. As part of these arrangements, Crown has agreed not to declare or pay dividends in respect of the half year ending 31 December 2021 or where a review event is triggered as a result of a cancellation or suspension of any of Crown’s Australian casino licences
Crown’s interim Chairman, Jane Halton, said: “2021 has been a challenging year for Crown, with intense regulatory scrutiny and unprecedented impacts on
business operations from the COVID-19 pandemic. Dr Ziggy Switkowski will join the Board as Chairman following receipt of all necessary regulatory approvals as part of the planned succession process. The Board welcomes Dr Switkowski to Crown and is confident he has the necessary capability and experience to lead the Board at what is a critical time for the organisation.
“Under the new leadership of our significantly renewed Board and senior management team, Crown is well placed to continue the momentum of change as we implement the reforms contained within our comprehensive Remediation Plan. We believe successful implementation of this Remediation Plan will position Crown as an industry leader in our approach to governance, compliance, responsible gaming and the management of risk – in particular the risk of financial crime – underpinned by an uplifted organisational culture. We will work hard to earn the continued trust of our regulators and communities as a responsible operator of outstanding quality integrated resorts.
“Crown is supportive of the measures taken by State and Federal Governments in response to COVID-19, with our priority being the health and safety of our employees, customers and the community. Recognising the impact COVID-19 has had not only on Crown’s business operations, but directly on Crown’s employees, we have proactively sought ways to support our people through this period. This has included financial support to employees who have been stood down, as well as those suffering serious financial hardship. Crown has also provided other forms of support to employees, such as ongoing access to Crown’s assistance and wellness program. I would like to thank all of our employees for their continued efforts and the resilience they have shown through this challenging period.
“Looking ahead, COVID-19 continues to create uncertainty, with variable operating restrictions remaining a feature of everyday life and likely to continue to materially influence business performance. Notwithstanding the current challenges facing the business, we remain optimistic and believe that Crown has a truly special portfolio of assets. Crown Melbourne and Crown Perth are world-class entertainment precincts and we are excited about the prospects for Crown Sydney. We look forward to welcoming back soon our many thousands of guests and employees across all of our properties once we emerge from the current challenges of the pandemic.”
Crown’s Chief Financial Officer, Alan McGregor, said: “Crown’s full year results reflect the severe impact on operations from the COVID-19 pandemic. Crown Melbourne’s gaming operations were closed for a large part of the financial year and, when open, gaming facilities were subject to ongoing operating restrictions. Conversely, Crown Perth delivered strong performance during the financial year. Crown Perth re-opened with restrictions towards the end of June 2020 and remained open for the entirety of the first half, trading above expectations. Crown Perth faced several short-term closures throughout the second half, and whilst trading performance has rebounded quickly following each shutdown, overall performance moderated throughout the course of the year.
“Crown Sydney opened in a restricted capacity in late December 2020 and while gaming operations are yet to commence as Crown continues its consultation process with ILGA on suitability, the non-gaming operations observed encouraging property visitation. Notwithstanding, Crown Sydney delivered an overall operating loss for the financial year given the impact of COVID-19 related restrictions, border closures and the limited scale of operations.
“We are continuing to see good momentum in Crown Sydney apartment sales, with over $1bn in gross sales and pre-sale commitments achieved to date, representing approximately 80 per cent of the apartments by number. Settlement of the apartment sales commenced in April 2021, with approximately $650 million in proceeds received during the period allowing Crown to reduce outstanding debt and fully repay the $450m project finance facility prior to year-end.
“Unfortunately, COVID-19 related restrictions are continuing to impact performance as we enter the 2022 financial year. Crown Melbourne has been closed for the majority of this financial year, whilst stay at home orders were imposed in Sydney on 26 June 2021 and remain in place. Crown Perth recommenced operations on 6 July 2021 following a short-term closure towards the end of June 2021, and is transitioning gaming and non-gaming activities to pre-lockdown conditions following the staged removal of remaining restrictions.
