GGRAsia – Crown Resorts’ profit up on sale of Melco Crown shares

Crown Resorts’ profit up on sale of Melco Crown shares

Aug 17, 2016 Newsdesk Latest News, Top of the deck, World

Australian casino company Crown Resorts Ltd on Wednesday reported a net profit of AUD948.8 million (US$730 million) for the year ended June 30, up by 146.4 percent from the preceding fiscal year.

The increase in profit was supported by an AUD602 million gain from selling down the stake in Asian casino developer Melco Crown Entertainment Ltd. The Australian firm in May reduced its ownership in Melco Crown from 37.3 percent to 27.4 percent and entrepreneur James Packer – Crown Resorts’ major shareholder – resigned as co-chairman of Melco Crown.

Without the one-off gain, net profit for the year would have been AUD393.6 million, down 11.8 percent year-on-year, the firm said. Normalised net profit after tax, which includes adjustments for expected win rates, was AUD406.2 million for the year, down 22.7 percent, the company said in a regulatory filing.

Crown’s earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by 10.7 percent to AUD861.4 million.

After smoothing out the volatility in casino winnings, Crown Resorts’ share of Melco Crown’s reported result for the year was an equity accounted profit of AUD42.7 million, down 65 percent year-on-year.

Melco Crown on August 4 reported net income of US$30.8 million for the three months to June 30, up 27 percent from the prior-year period.

On Wednesday, Crown Resorts’ actual EBITDA for its Australian resorts – Crown Melbourne and also Crown Perth (pictured) – stood at AUD949.2 million, up 0.2 percent from the previous fiscal year.

The casino firm said group-wide revenue reached approximately AUD3.60 billion in the year to June 30. The majority of that was from gambling, with main gaming floor revenue increasing by 5.8 percent to AUD1.68 billion, Crown Resorts said. The company reported revenue from VIP play of AUD1.0 billion for the period.

“The 2016 full year result reflects a solid performance from our Australian operations and continued subdued trading in Macau,” said Crown Resorts’ chief executive, Rowen Craigie, in a statement accompanying the results.

Crown declared a final dividend of AUD0.395 per share, partially franked, to be paid on October 7.

Spinoff approvals

Crown Resorts in June said it would separate its “high-performing” Australian assets from its international businesses.

“Work on the proposed demerger is ongoing in particular, to obtain all the necessary approvals, consents and waivers from third parties, including from governments and gaming regulators,” said Crown Resorts in Wednesday’s filing.

When it announced the potential spinoff in June, the company also said it would explore the possibility of an initial public offering (IPO) for a property trust that would include all of the company’s Australian hotels, except Crown Towers in Melbourne in the state of Victoria. Crown Resorts plans to keep a 51-percent stake in the proposed property trust.

Crown Resorts is still evaluating that IPO, the company said on Wednesday, adding that the plan is still subject to approval by its board.

“The evaluation of any IPO is being progressed independently of the proposed demerger,” the company added.

Crown Resorts plans to open a new casino resort in Sydney’s Barangaroo district. A community group however is challenging the project, claiming that the planning approval was invalid. Crown Resorts said earlier this month it would “defend vigorously” the legal challenge to the planning permission.

Crown Resorts’ pursuit of a Las Vegas casino and hotel project called Alon is progressing according to plan, the firm said.

“Necessary permits have been applied for and a construction contract is being negotiated. The capital structure of the ownership entity is yet to be settled,” Crown Resorts said on Wednesday.