James Packer
James Packer, Australia’s third-richest man, stepped down as chairman of Crown Resorts Ltd as he seeks to focus on developing the casino group’s resorts overseas.
Packer, with a net worth of USD4.6 billion according to the Bloomberg Billionaires Index, will remain a director of the company and continue to hold a majority stake, Melbourne-based Crown said in a statement yesterday as it reported annual earnings that met analyst estimates.
Shares slumped as much as 6.4 percent in intraday trading, the most since 2011, before paring declines.
Packer said he’d focus on resorts that Crown is developing around the world, which include a planned casino in Las Vegas and a hotel for high-rollers on Sydney Harbour due to open in 2019. He recently sold his six-level Sydney harbor side mansion, signaling he intends to spend less time in Australia’s largest city.
“His departure is a big loss and it’s not like a Packer not to see something through to completion,” Evan Lucas, a market strategist at IG Ltd. in Melbourne, said by phone. “The result was a little bit weaker on pretty much every metric and him leaving is a major problem. Where is Crown’s growth?”
Crown shares closed down 3.2 percent at AUD13.09. Echo Entertainment Group Ltd., Crown’s main domestic competitor, rose 3.4 percent to close at a record A$5.15.
Robert Rankin, a former Deutsche Bank AG banker and the chief executive of Packer’s family company Consolidated Press Holdings Ltd., has been appointed as Crown chairman.
“Rob Rankin has my complete trust and respect as an executive and he will do an outstanding job as chairman,” Packer said in a statement. “Crown has a pipeline of resorts globally and this is where the majority of my time will be spent.”
Packer will continue as a director of Crown and remain co-chairman of the Alon Resort project in Las Vegas and Melco Crown Entertainment Ltd., which owns Macau’s City of Dreams and Studio City resorts.
Packer is stepping down at a time when Crown faces challenges both at home and abroad.
Crown’s share of normalized net profit from its 34 percent stake in Melco Crown slumped 45 percent to A$161 million. Macau’s casino revenue fell 35 percent from a year earlier in July. The city “is currently experiencing a difficult period which has adversely affected all casino operators,” Crown said in a statement Thursday.
At Crown Perth, revenues from the main gaming floor increased just 2.6 percent amid a slump in Western Australia state’s mining industry.
The fall in Crown’s net income compares to a 38 percent gain to A$219 million reported by Echo in annual results Wednesday. A consortium led by Echo last month beat off competition from Crown and Greenland Investment Pty. to develop a new resort in the center of Brisbane.
Echo’s Sydney and Gold Coast casinos seem better placed to benefit from growing Chinese tourism to Australia, said IG’s Lucas.
“Clearly Queensland is seen as a better growth market for Asian clients,” he said. “It’s a hard time for Crown at the moment.” Bloomberg
No Comments