Australia’s Crown Resorts has announced a narrowed AU$164.8 million (US$111 million) loss for the 12 months to 30 June 2024, although the 17.4% improvement over last year’s AU$199 million (US$133 million) loss appears to be a result of cost cutting rather than any uptick in business volumes.
According to information filed with the Australian Securities and Investments Commission on Friday, group-wide revenues were 0.2% lower than the prior year at AU$2.8 billion (US$1.88 billion) with Crown also revealing further asset sales as owner Blackstone – which bought the casino operator for AU$8.9 billion (US$5.97 billion) in 2022 – looks to recoup its investment.
Crown said the FY24 result “reflects the continued challenging operating conditions and macroeconomic environment impacting the hospitality and tourism industry. Crown remains committed to its continued transformation and long-term strategy of sustainable growth.”
Having already sold its 20% stake in global restaurant chain Nobu earlier this year, Crown’s filings also reveal that the company recently offloaded a parcel of land adjacent to Crown Melbourne for AU$85 million. The One Queensbridge site had once been intended to house a new AU$1.75 billion, 90-floor hotel and apartment building that would have been Melbourne’s tallest tower.
Crown added that it has reached an agreement to sell one of its private jets.
Once the dominant player in Australia’s casino industry on the back of Crown Melbourne’s success, Crown’s recent struggles follow multiple inquiries into its behaviors which found the company unsuitable to hold casino licenses for its properties in Sydney, Melbourne and Perth due to systemic issues around money laundering controls, responsible gambling, tax payments and compliance.
Crown has since returned to suitability in NSW, home of Crown Sydney, and Victoria, home of Crown Melbourne, following a comprehensive transformation led by CEO Ciarán Carruthers. However, the challenging economic environment and significantly enhanced operating restrictions as a result of the findings of the inquiries have continued to impact profitability.
In a recent interview with Inside Asian Gaming, Carruthers – who is stepping aside at the end of the year – revealed the company had lost 13% of foot traffic at Crown Melbourne when it rolled out mandatory carded play last December but said recent indications had been more encouraging.
“Over time we’ve had more and more [people] signing up,” Carruthers explained. “Some of that business returned because we have so much more to offer than just the machines, in terms of bars, restaurants and entertainment. A big part of our drive repositioning our brand is a reminder that we are an integrated resort, not just a casino.
“There were also additional costs for running the AML requirements, the responsible gambling requirements, the additional staff to manage new processes. That obviously impacts margins. But we’re seeing improvement with the restructure of our cost base that’s been rolled out over the last six to nine months, with a greater than doubling of our margin across the entire business. And there’s still room for improvement.”
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