Macau has witnessed a drop in VIP clientele that resulted in significant decline in revenue. However, the Macau struggle has proven to be an opportunity for Australian casinos to shine and take over Asian VIPs. High rollers who avoid Macau – the former gambling paradise – now spend record amounts of money in Australia, most precisely at Echo Entertainment casinos. The outcome for the group is spectacular – profit pushed up by more than half.
High stakes gamblers wagered A$46 billion at casino tables operated by Echo Entertainment Group in the 2015 fiscal year. This is a record for the company that raised the net profit for 52% up to A$219 million. The consensus estimate was set at A$205 million and it was easily surpassed with the “help” of VIP clientele. The group’s revenue grew for 18.5% to A$2.14 billion.
The latest results were commented by Echo chief executive, Matt Bekier, who said that the company showed strong performance and expressed hopes that there was “more in the tank.” Bekier finished his statement saying that they had “a profitable platform for growth.”
The main reason for this amazing success of Echo Entertainment Group is The Star Casino. Many believe that the redevelopment worth A$870 that took place between 2009 and 2013 is now starting to pay off. Bekier revealed that the casino has surpassed normalised EBITDA of A$340 million in the year for 25% and now that number is A$356 million.
Besides its valuable Sydney gambling facility The Star, Echo’s two Queensland casinos showed good results as well. Treasury Brisbane and Jupiter’s Gold Coast combined revenue rose for 10% up to A$692 million and their combined earnings grew for 21.5% up to A$165 million.
Another record set at Echo Entertainment Group for the FY2015 was the total VIP turnover that noted impressive raise of 53.5%. Two things that fell, however, are the VIP win rate (from 1.32% to 1.27%) and bad debts (from A$41m to A$16m).