Supplier News
Australia – Crown blames profit dip on offloading The Star
By Phil - 23 August 2013
Crown Resorts has blamed its strategic decision to offload its share in rival operator Echo’s The Star as the reason its annual net profit declined in the year up to June.
The operator revealed that net profit dropped by 23 per cent to A$395.8m, including a $99.4m loss due to the sale of Crown’s 10 per cent interest in Echo.
In May Crown sold its Echo stake for $264m to concentrate on its proposal to develop a high rollers casino resort at Sydney’s Barangaroo. Whilst that proposal has won approval in the first round of government hurdles, Echo will remain the exclusive casino operator in the state until 2019. Underlying profit at Crown, which ignores one-off items such as the Echo stake, actually increased by 14 per cent to $473.2m due mainly to its operations in Macau.
Revenue at its Australian venues in Melbourne and Perth dropped by three per cent and 11.1 per cent, respectively.
Chief Executive Officer of Crown, Mr Rowen Craigie, said: “Overall, the results for Crown’s wholly-owned Australian resorts, Crown Melbourne and Crown Perth, were mixed as we continue to see evidence of weak consumer sentiment, particularly in Melbourne. Cost control continues to be a focus at both properties. Main floor gaming generated revenue growth of 3.6 per cent across Crown Melbourne and Crown Perth. The expansion of Crown Perth’s gaming floor to accommodate new gaming product was a significant source of growth. However, Crown Melbourne was impacted by the effects of refurbishment disruption. VIP program play turnover at our Australian resorts grew 7.8 per cent and non-gaming revenue grew 8.1 per cent compared with last year.
The rebranding of Crown Perth from Burswood was completed in September 2012 following the opening of the expansion of Crown Perth’s main gaming floor to accommodate new gaming product and new food and beverage areas. Crown Perth’s restaurant facilities were further enhanced with the recent opening of the new premier Chinese restaurant, Silks.Work is progressing on the early stages of Crown Towers Perth.
Crown’s share of its Macau interests; Melco Crown Entertainment, provided an equity accounted profit of $152.3m. Mr. Craigie said: “The growth in Melco Crown’s EBITDA was achieved despite an overall subdued performance in the Macau VIP market and was attributable to strong growth in the mass market table games segment at City of Dreams and improved group-wide rolling chip volume, together with MCE’s committed cost control culture. City of Dreamsagain increased its market share in the mass market table games segment and achieved market-leading mass table yields, which is increasingly important in a table supply constrained market.”
Crown also revealed that its interests in The Aspers Group casino in Stratford, London, were impacted by disruptions arising from the staging of the London Olympics. However, trading results in the second half of the year have improved. The fit out of a new casino in Milton Keynes, London, is underway and the casino is expected to open in early September 2013.
