Australia casino giant Crown Limited took a 34% hit in profit in the first half.
Net income was A$180.8 million for the six months ended 31st December. But a $52 million write-down of the company’s 10% stake in listed rival Echo Entertainment figured prominently in the accounting. Excluding that and other one-time items, and adjusting for normalized hold on VIP play, Crown realized $243.5 million in actual net income, a 15% increase year on year.
Crown, controlled by billionaire James Packer, operates gaming resorts in Melbourne and Perth and has a 33.7% stake in Macau operator Melco Crown Entertainment, which contributed $64.5 million to the company’s bottom line in the first half.
VIP turnover was up at Melbourne and Perth a combined 12.3% to $417.0 million, representing a 15.2% increase at Melbourne and 2.8% at Perth.
The key for the company going forward, said Chief Executive Rowen Craigie, is more Chinese high rollers. “Australia has less than 2% market share,” he said. “So there is plenty of opportunity for the VIP business to grow across all of the Australian casinos. This is not a fixed market where Australian properties are going to cannibalise each other.”
But the country needs a “critical mass” of luxury properties to compete against Macau, Singapore and Las Vegas, he said. To that end, Crown is looking to expand into Sydney and has applied to regulators in New South Wales for approval to enlarge its stake in Echo, which has the official monopoly in Australia’s largest city and No. 1 tourism destination. The company also is lobbying the state for approval to construct a competing high-end resort on the waterfront on Sydney’s Darling Harbor.
