Crown Resorts says it will reassess its long-term VIP strategy after seeing its full year VIP turnover slashed in half following the arrests of 19 employees in mainland China last October.
The Australian gaming giant released its annual results for the year ended 30 June 2017, with all eyes on the VIP segment where turnover fell 48.9% to AU$33.3 billion.
The fall in VIP play saw normalized revenue at Crown’s Australian properties fall 12.7% to AU$2.82 billion, with normalized EBITDA down 10.7% to AU$833.7 million. Main gaming floor revenue fell slightly by 1.4% to AU$1.66 billion.
“We will wait until the China situation is resolved and then we are going to sit down and consider our long-term position,” said Executive Chairman John Alexander. “Until this is finally resolved we are stepping back from an aggressive position in the VIP market.”
At Crown Melbourne, a 49.7% fall in VIP revenue to AU$340.3 million saw normalized revenue come in at AU$1.99 billion, down 13.7% year-on-year, while Crown Perth reported normalized revenue of AU$830.1 million on the back of a 46.1% fall in VIP revenue to AU$109.3 million.
Despite the decline, Crown Resorts saw its profit soar to AU$1.9 billion thanks to the sale of its AU$1.7 billion stake in Melco Resorts earlier this year.
“Crown’s Australian operations’ full year result reflected difficult trading conditions,” Mr Alexander said.
“Total normalized revenue across Crown’s Australian resorts declined by 12.7%. This decline was due primarily to the reduction in VIP program play revenue in Australia, which was down 48.9% on the prior comparable period.
“Main floor gaming revenue also decreased by 1.4%, with Melbourne flat and softness in Perth.”
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