Crown Resorts profit falls on Macau slide

by Charlotte Lee Last Updated
Packer team distances itself from Crown?s failings

Gambling mecca Macau is in a huge downturn, which has greatly affected James Packer’s Crown Resorts, with profit from the gaming giant’s Asian casino falling by almost two-thirds.

Despite this, the Casino giant posted a net-profit of $948.9 million, boosted by a $602 million gain from Crown’s stake in its Macau casino business Melco Crown in May.

Crown’s Australian casinos saw steady returns and saw the company’s normalised profit slump 22 per cent to $406.2 million. That amount excludes one-off items and variations in the theoretical win rate against high-rolling gamblers.

Crown’s full-year results published on Wednesday showed it made $3.23 billion from its local casinos last year, up 0.8 per cent from a year earlier.  The vast majority of that was from gambling, with non-gaming revenue contributing just $674.6 million of the total.  Main gaming floor revenue increased by 5.8 per cent.

However, Crown’s share of profits from its stake in the Melco Crown casinos in Macau and one in Manila plunged by $103.2 million, or 64 per cent, to $58 million.

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

The $406.2 million normalised profit slightly beat a consensus forecast of $405 million by six analysts in a Bloomberg survey. Crown’s shares gained 4.8 per cent to $13.93 in mid-morning trading in Sydney.

The main reason for the slowdown in Macau, the world’s largest gaming economy is the Bejing government’s crackdown on corruption.  The former Portuguese colony is the only place in China where casino gambling is legal and gambling revenue over the past two years has been five times that of Las Vegas.

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