Crown Resorts backed in despite profit tumble on failed Sri Lanka gambit
Saturday, 21 February 2015 01:50
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AAP: SHARES in James Packer’s Crown casino group have soared by more than 7% despite a slump in first-half net profit.
Crown suffered a 47% fall in profit for the six months to December after being hit by asset impairment charges and hefty costs from its abandoned Sri Lanka resort.
The gaming group’s net profit fell to $ 201.75 million in the period, down from $ 382.45 million a year earlier.
The result was weighed down by $ 61.3 million in significant items linked to a write-down in Crown’s investment in the US-based Cannery and costs from its now abandoned plan for a $ 350 million casino resort in Sri Lanka.
Crown’s earnings were also hit by a sharp fall in earnings from its Melco Crown Entertainment business in Macau, where weak market conditions adversely affected all casino operators.
The group’s normalised net profit – which strips out VIP win rates, significant items and opening costs from Melco Crown in Macau – climbed 2.3% to $ 322.4 million.
Statutory revenues rose 9.2% to $ 1.7 billion while its normalised result was up 17.2% at $ 1.72 billion.
Chief Rowen Craigie said gross gaming revenues across the Macau market fell 30.4% in the six-month period.
“The deterioration in the Macau market has continued into the second half,” he said in a statement.
However, he described as satisfactory the performance of Crown’s Australian gaming businesses given the subdued level of consumer sentiment.
Normalised earnings at Crown Melbourne rose by 26.1% and by 7.7% at Crown Perth. Main floor gaming revenue rose 3.5% at both casinos.
Craigie said there had been strong growth in the VIP program play turnover towards the end of the first half, with record monthly turnover in November and December in Melbourne.
Crown’s shares were up by $1 .02, or 7.1%, at $ 15.48 in morning trade.
OptionsXpress market analyst Ben Le Brun said investors had expected a disappointing result from Crown’s Macau business.
“It looks as if a number of other parts of businesses have picked up the slack and it’s come in better than expected,” he said.
