Australian casino company Crown Resorts Ltd reported a net profit of AUD205 million (US$147.1 million) for the six months ended December 31, a 1.6 percent rise from the prior-year period.
Normalised net profit, which includes adjustments for expected win rates, was AUD210.3 million in the fiscal first half, down by 34.8 percent from AUD322.4 million a year earlier, the casino operator said in a regulatory filing on Thursday.
Crown Resorts reported earnings before interest, taxation, depreciation and amortisation (EBITDA) of AUD455.9 million, up by 12.7 percent from a year ago. On a normalised basis, EBITDA fell 5.7 percent year-on-year to AUD424.4 million.
Revenue from Crown Resorts’ operations for the period reached AUD1.8 billion, a 10.1-percent improvement from the prior-year period.
The half-year results were negatively impacted by a slump in fortunes at joint venture Melco Crown Entertainment Ltd, which Crown Resorts said was adversely impacted by the “weak market conditions in Macau”.
After smoothing out volatility in casino winnings, Crown Resorts’ share of Melco Crown’s reported result for the six months to December was an equity accounted profit of AUD9.4 million, down 89 percent from the prior-year period. On a normalised basis, such profit would be down 66.3 percent year-on-year to AUD37.2 million, said the Australian company.
Crown Resorts – majority-owned by billionaire James Packer’s Consolidated Press Holdings Pty Ltd – owns a 34.3-percent stake in Asian casino developer and operator Melco Crown.
For full year 2015, Melco Crown reported net income of US$105.7 million compared to US$608.3 million in the previous year. Melco Crown also announced last week the payment of a special dividend, of which Crown Resorts’ share will be US$120 million.
Mr Packer (pictured) stepped down as a director of Crown Resorts in December, only four months after he resigned as chairman. He remains as co-chairman of Melco Crown and as co-chairman of Alon, a Las Vegas casino resort project.
“The decline in Melco Crown’s result was attributable to weak market conditions in Macau,” said Crown Resorts chief executive, Rowen Craigie.
Market wide casino gross gaming revenue (GGR) in Macau declined 34.3 percent in 2015 compared to the previous year, according to official data.
“However the payment of a special dividend by Melco Crown to Crown of US$120 million, highlights Melco Crown’s strong cash position and cash flow generating ability,” said Mr Craigie.
Main floor gaming revenue at Crown Resorts’ two Australian casinos in Perth and Melbourne increased by 9.8 percent year-on-year to AUD861.1 million.
VIP play turnover however declined by 3.8 percent year-on-year to AUD35.7 billion, “a reasonable outcome given the strong growth in the previous comparable period of 61.4 percent and the depressed nature of the VIP programme play market across Asia,” Mr Craigie said.
Crown Resorts also said it has not received any privatisation proposal from Mr Packer’s Consolidated Press Holdings. Several media outlets reported in December that Mr Packer was in talks to take some of its casino assets into private ownership.
“Crown again confirms that it has not received any such proposal from any party,” the company said in a statement. “Crown is aware of its continuous disclosure obligations and will update the market if required should relevant circumstances affecting Crown change.”
Crown Resorts declared a partly franked dividend of AUD0.33 per share payable on April 6 to shareholders registered as of March 23.
The firm’s shares plunged by as much as 9.2 percent in early trading and were down 5.4 percent around lunchtime (Australia time).
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Lionel Leong Vai Tac
Macau’s Secretary for Economy and Finance