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Macau gaming slump weighs on Australia's Crown
[SYDNEY] Australia's Crown Resorts Wednesday posted strong full-year net profits boosted by the part sale of its stake in a Macau-focused group, but saw underlying earnings fall as the gaming slump in the Chinese territory ate into revenue.
Casino mogul James Packer's Crown Resorts, like other operators, has been hurt by softening demand in Macau following a Chinese corruption crackdown, with the Australian company moving to sell some of its Melco Crown Entertainment stake back to the subsidiary in May.
The sale lowered Crown's slice of Melco to 27.4 per cent and saw the operator pocket A$602 million (S$620.3 million) to boost net profit for the year to June 30 by 146.4 per cent to A$948.8 million, compared to the previous corresponding period.
But underlying earnings - which exclude one-off items - declined 22.7 per cent to A$406.2 million despite solid gaming revenue in the Australian casino resorts. Weak market conditions in Macau "adversely impacted" Melco's performance, the firm said.
"The 2016 full year result reflects a solid performance from our Australian operations and continued subdued trading in Macau," Crown Resorts' chief executive Rowen Craigie said in a statement.
"Overall gross gaming revenue across the Macau market in the full year to 30 June 2016 declined by more than 20 per cent." Crown declared a final dividend of 39.5 Australian cents for a full-year payout, compared to 19 cents in the prior period.
Shares in Crown rose 3.16 per cent to A$13.71 in early trade on Wednesday.
Crown in June said it would separate its "high-performing" local assets from its international businesses, particularly the casinos in under-performing Macau.
Main floor gaming revenue in the Australian resorts, which includes casinos in Melbourne and Perth, rose 5.8 per cent to A$1.68 billion, while non-gaming revenue edged up 1.5 per cent to A$674.6 million.
But Crown's share of underlying earnings for Melco slumped 64.0 per cent to A$58.1 million, while its share of net profit also plunged 65.0 per cent to A$42.7 million.
Crown added that it would "vigorously" fight a legal case challenging plans to build a A$1.5 billion towering six-star hotel and casino complex on Sydney harbour aimed at Asian high-rollers, for which it won government approval in June.
Billionaire Mr Packer, who is engaged to pop diva Mariah Carey, owns 53 per cent of Crown Resorts but resigned as chairman in 2015.