Written on the 25 February 2016 by Nick Nichols


A SLUMP in Macau's casino market has hit James Packer's Crown Resorts (ASX:CWN) hard as the company posted a 22 per cent slide in interim net profit to $205 million.

However, the Australian market offered some support to the Melbourne-based casino operator.

"The 2016 first-half results across Crown's portfolio of businesses were varies," says Crown's CEO Rowen Carnegie.

Main floor gaming revenue at the company's Australian resorts rose 9.8 per cent to $861 million, although VIP turnover edged lower after a significant spike of more than 61 per cent a year earlier. Total group revenue rose 10 per cent to $1.88 billion.

Carnegie says weak market conditions that hit the company's Melco Crown Entertainment (MCE) joint venture, in which it holds a 34.4 per cent stake, led to a 30 per cent fall in gaming revenue from the business.

Crown's share of the reported net profit after tax from MCE was $9.4 million, down 89 per cent from $75.9 million previously.

The Macau market has seen a widespread downturn as a result of a crackdown on corruption by Chinese authorities.

Carnegie has put a positive spin on the Macau venture, declaring that cashflow remains strong within the business.

"The payment of a special dividend by MCE to Crown of $US120 million highlights MCE's strong cash position and cashflow generating ability which has enabled MCE to return surplus capital to shareholders while still investing in MCE's business," he says.

The special dividend has helped Crown deliver a 33c payout per share to shareholders for the half year.

Reported EBITDA from Crown Melbourne jumped 15.8 per cent to $352.5 million, buoyed by a $19.3 million windfall from VIP players.

In the previous corresponding period, luck wasn't on Crown Melbourne's side as it suffered a $30 million shortfall on its theoretical win rate from VIP players.

Crown Perth EBITDA was up 1.5 per cent to $137.7 million.

Crown Aspinalls EBITDA shifted into the black with a reported figure of $14.9 million which represents an $18.4 million turnaround for the London casino.

Author: Nick Nichols





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