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Australia – Macau dip sees Crown slip by 22.7 per cent

By - 18 August 2016

Australian casino operator Crown Resorts has reported a 22.7 per cent fall in full-year net profit with a small gain domestically offset by the construed downturn in Macau despite the company reducing its commitment to the market by selling shares to its partner in Melco Crown Entertainment.

Normalised net profit for the company was A$406.2m for the year down from A$525.5m a year ago.

“Macau continues to face challenges arising from softer gaming demand, which has adversely affected all casino operators,” the operator said. “However, Melco Crown believes that revenue trends, particularly in the mass market segments, will improve as Macau further evolves into a multi-faceted, mass-market-focused destination.”

The company’s GGR in Macau dropped by 22.5 per cent. In Melbourne, Crown said normalised operating margin fell to 29.1 per cent whilst across its Australian casinos, main-floor gaming revenue rose 5.8 per cent offset by less VIP revenue which fell eight per cent.
Chief Executive Officer of Crown Resorts, Rowen Craigie, said: “The 2016 full year result reflects a solid performance from our Australian operations and continued subdued trading in Macau. The result also includes the profit generated from the partial sale of Crown’s MCE shareholding, which has been reported as a significant item.”

“At Crown’s Australian resorts, main floor gaming revenue increased by 5.8 per cent, which was a solid performance. VIP program play turnover in Australia of $65.1 billion (down eight per cent) was a reasonable outcome given the strong growth in the prior comparable period of 41.8 per cent and the depressed nature of VIP gaming activity across Asia.”

“The decline in MCE’s result was attributable to weak market conditions in Macau. Overall gross gaming revenue across the Macau market in the full year to 30 June 2016 declined by more than 20 per cent.”

“The sale of 155m ordinary shares in MCE generated proceeds of $1,067.1m. This, combined with $180.7 million in dividends received from MCE in the year, has enabled Crown to reduce Crown’s net debt and to maintain a strong balance sheet and credit profile to fund existing Australian development projects. Since the formation of MCE, Crown has achieved cash returns equivalent to double the total cash it has invested in MCE. Crown continues to hold a 27.4 per cent interest in MCE valued at approximately $2.3bn at 30 June 2016.”

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