Australian casino operator Crown Resorts Limited has released its financial results for the twelve months to the end of June showing a 22.7% decline year-on-year in normalized net profit after tax to $406.2 million.
The firm behind Melbourne’s Crown Casino And Entertainment Complex as well as the six-star Crown Sydney in New South Wales, Crown Resorts Limited recently sold 10% of its shareholding in Macau casino operator Melco Crown Entertainment and revealed that this transaction netted $602 million. In addition, the company stated that its Australian businesses saw normalized full-year revenues totalling $3.23 billion, which represented a gain of 0.8% year-on-year, while normalized earnings before interest, tax, depreciation and amortization grew by 1.8% to $933.2 million.
However, its non-Australian enterprises operated via Melco Crown Entertainment, which include the Altira Macau and Manila’s City Of Dreams developments, reported an 11.8% decrease year-on-year in annual net profit after tax to $393.6 million despite a 10.7% swell in reported normalized earnings before interest, tax, depreciation and amortization to $861.3 million.
“The 2016 full-year result reflects a solid performance from our Australian operations and continued subdued trading in Macau,” said Rowen Craigie, Chief Executive Officer for Melbourne-based Crown Resorts Limited. “The result also includes the profit generated from the partial sale of Crown Resort Limited’s Melco Crown Entertainment shareholding, which has been reported as a significant item.”
At its Australian resorts, which moreover include the Crown Perth property, Crown Resorts Limited declared that a 5.8% rise year-on-year in full-year main floor gaming revenues to $1.68 billion came in the face of an 8% fall to $65.1 billion in VIP program play turnover and was a “reasonable outcome” taking into account “the strong growth in the prior comparable period of 41.8% and the depressed nature of VIP gaming activity across Asia”.
“The decline in Melco Crown Entertainment’s result was attributable to weak market conditions in Macau,” said Craigie. “Overall gross gaming revenues across the Macau market in the full year to June 30, 2016, declined by more than 20%.”
Crown Resorts Limited explained that its net operating cash flow for the full-year period dropped almost 24% year-on-year to $482.7 million while its net debt stood at just over $1.96 billion. It announces that its total liquidity excluding working capital cash of $151.1 million was currently $1.58 billion and represented by $298.6 million in available cash and $1.28 billion committed undrawn facilities.
“The sale of 155 million ordinary shares in Melco Crown Entertainment generated proceeds of $1.06 billion,” said Craigie. “This, combined with $180.7 million in dividends received from Melco Crown Entertainment in the year, has enabled Crown Resorts Limited to reduce [our] net debt and to maintain a strong balance sheet and credit profile to fund existing Australian development projects. Since the formation of Melco Crown Entertainment, Crown Resorts Limited achieved cash returns equivalent to double the total cash it has invested in Melco Crown Entertainment. Crown Resorts Limited continues to hold a 27.4% interest in Melco Crown Entertainment valued at approximately $2.3 billion.”