James Packer
The gaming slump of Melco Crown Entertainment resorts in Macau has contributed to a 22.7 percent decline in the full-year net profit of Australia’s Crown Resorts Ltd.
The normalized net profit of the company was AUD$406.4 million for the 12 months to June 30, down from AUD$525.5 million a year ago, slightly beating Bloomberg analysts’ consensus forecast of AUD$405 million.
Crown recorded AUD$3.23 billion in full-year revenue, up 0.8 percent on contributions from Crown Melbourne and Crown Perth.
Although Chinese high rollers and VIP gamblers flocked to Australia during the anti-corruption campaign to avoid scrutiny in Macau, the rise of lower-cost betting destinations has affected Crown and its rival, Star Entertainment Group Ltd.
The company’s Australian casinos saw a 5.8 percent rise in in its mass market gaming turnover, but VIP revenue slipped 8 percent; reflecting the “depressed nature of VIP gaming activity across Asia.”
Meanwhile Crown Resorts said in a statement that Macau continues to face softer gaming demand, which continues to hurt all casino operators.
Yet the AUD$9.7 billion company is optimistic that revenue will recover.
“Melco Crown believes that revenue trends, particularly in the mass market segments, will improve as Macau further evolves into a multi-faceted, mass-market-focused destination,” Crown noted.
According to Crown, gross gaming revenue across the Macau market for the first six months of 2016 fell 22.5 percent.
“I don’t think anyone is saying the VIP levels in Macau [will] return to the levels that we saw three or fours years ago,” Crown chief executive
Rowen Craigie said.
“Macau is a long-term investment. We’re very comfortable about having a presence – it’s still the largest gambling market in the world by a long stretch,” he added.
Lawrence Ho’s Melco Crown Entertainment is a joint venture with Crown Resorts’ largest shareholder, James Packer.
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