Crown Resorts Half Yearly Revenue Increases, Profits Plunge

Australian casino and resorts company Crown Resorts posted mixed results in their half yearly declaration today. The company’s statutory profit fell by 47.2 per cent to AUD$201.8 million, while normalised net profit increased by 2.3 per cent to AUD$322 million.

The latter amount increased the expectations of business analysts, who originally predicted a profit of $272 million would be made. Arguably the most positive news for Crown, however, was the company’s increase in total revenue, which went up by 9.2 per cent to $1.7 billion.

The increase in earnings in Crown Resorts’ Australian casinos was the main reason behind the growth, with its flagship casino, Crown Melbourne, increasing earnings by 26.1 per cent.

Its interests in Macau, however, were a blight on the company’s overall performance over the last year.

Crown Resorts CEO Rowen Craigie said the decline in the overall gaming market in Macau continued to be a concern for the company.

News of the major decrease in its Macau operations did not seem to worry investors in the stock market, though. Shares in Crown Resorts increased by a whopping 9.8 per cent to AUD$15.88 on the Australian Stock Exchange (ASX) after the company’s half year results were made public.

Headed by the Australia’s third richest person, James Packer, Crown Resorts’ Australian casinos have hosted major poker events like the Aussie Millions and the WSOP Asia Pacific. The company’s Perth-based casino hosted the ANZPT Perth last week, which attracted players from all over Australia, Asia and Europe.

While the overall results were mixed and the impact on its share price was positive, there is the possibility of further challenges ahead for Crown’s operations. The overall market in Macau may continue to suffer into the future as China continues to clamp down on corruption in the territory, which was spooked the gaming market there.

Australia’s economy is also at risk of slowing down further in the short-term future, which could adversely impact domestic spending at Crown’s Melbourne and Perth casinos.

However, Australia’s falling dollar may also attract greater amounts of overseas gamers to its shores and casinos. Should this occur, it may lead to further revenue increases at Crown’s casinos.

More importantly for the poker community, a falling Australian dollar may also lead to increased participation in Crown’s poker events. This is because accommodation would be cheaper and although the prize money in the events will be be lower for the internationally based poker players (due to AUD buy-ins), the buy-ins will also be smaller, attracting greater number of participants.

*Disclaimer – The writer of this article holds shares in Crown Resorts.

Photo: www.crownresorts.com.au