Billionaire James Packer (pictured) stepped down on Thursday as chairman of Australia’s Crown Resorts Ltd. Mr Packer will remain co-chairman both of Asian casino developer Melco Crown Entertainment Ltd and the “Alon Resort” casino-hotel project in Las Vegas, the company said in a filing.
Former Deutsche Bank executive Robert Rankin – in November named as chief executive of Mr Packer’s private company, Consolidated Press Holdings Pty Ltd – succeeds Mr Packer as chairman at Crown Resorts, the latter company said.
Mr Packer, who will take on a new role as executive director, stated he would remain deeply involved with Crown Resorts.
“Crown remains my number one business priority and passion. I am extremely proud of the company and look forward to continuing our efforts to build a global luxury brand. Crown has a pipeline of resorts globally and this is where the majority of my time will be spent,” Mr Packer said in a statement.
Saying that this was “the right time” for the company to make such a change, Mr Packer added that he would “continue to drive key projects, including our joint business in Asia and our planned resort in Las Vegas”.
“I will also be working to improve Crown’s online strategies, an area where I believe we could be doing better and a platform which will provide great potential for global growth in the future,” he added.
The announcement came after Crown Resorts, currently a casino operator in Australia and with investments in Asia, said its annual net profit was down 41 percent due to a slump in earnings from its Macau interests. Crown Resorts owns a 34.3-percent stake in Melco Crown, which on August 7 reported an 83-percent decline in net profit for the second quarter of 2015.
Mr Packer’s co-chairman at Melco Crown, Lawrence Ho Yau Lung, had told investment analysts on the latter firm’s second quarter earnings call on August 6 that he thought “structurally” the Macau VIP gambling market “will never be what it once was”.
Crown Resorts’ shares were down nearly 3 percent as of 2pm Sydney time, after falling 5.03 percent at the opening of trading, the stock’s biggest dive in five months.
Crown Resorts’ net profit for the year ended June 30 fell 41.3 percent year-on-year to AUD385.1 million (US$284.1 million), from AUD655.8 million a year ago. Its normalised net profit, which removes volatility linked to big spending gamblers, also fell 17.9 percent year-on-year to AUD525.5 million, the firm said on Thursday.
The full-year results include significant items of AUD61.3 million, consisting of asset impairments relating primarily to Crown’s investment in Nevada-based Cannery Casino and Resorts, and costs associated with a proposed project in Sri Lanka, pursuit of which has now been discontinued.
Crown Resorts’ revenue from operations in the year ended June 30 came in 12.6 percent higher year-on-year, at AUD3.5 billion. On a normalised basis, revenue was 16 percent higher at AUD3.4 billion, the company said.
Crown Resorts said its share of Melco Crown’s net profit for the year was an equity accounted profit of AUD122 million, down 57.6 percent from the previous year.
“Macau is currently experiencing a difficult period which has adversely affected all casino operators,” Crown Resorts said. Macau’s casino gross gaming revenue for the first seven months of 2015 is down 36.7 percent on the same period in 2014.
Crown Resorts added it was optimistic about the long-term prospects of the Macau market, giving as an example the Studio City casino resort on Cotai, scheduled to open on October 27, and which is 60-percent owned by Melco Crown.
“Melco Crown is monitoring news reports and Macau government policies relating to gaming table allocation in Macau,” Crown Resorts stated in its filing.
A Melco Crown majority-owned unit said on Tuesday it is preparing a “contingency plan” ahead of any gaming table allocation decision by the Macau government for its Studio City project.
In Australia, Crown Resorts said its normalised “VIP programme play” revenue increased by 41 percent to AUD706.6 million at its Melbourne casino and was up 44.1 percent to AUD249.3 million at its Perth casino.
“The removal of ‘Super Tax’ on VIP programme play at Crown Melbourne effective from 1 July 2014 has improved the international competitiveness of the Crown Melbourne VIP business,” the firm said.
The casino operator declared a half-franked final dividend of AUD0.19 per share to shareholders on the register at September 25. The dividend is due to be paid on October 9, it said.
Crown’s results come after Echo Entertainment Group Ltd posted a 52.2 percent increase to AUD219 million in annual net profit on Wednesday.
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"Much of the development in Macau would not have happened without him [Stanley Ho]"
Manuel Joaquim das Neves
Former director of Macau’s casino regulator