Crown Resorts’ profits were up 93 percent for the year ending 30 June 2017, thanks to the selling down of its shares in Macau resort operator Melco Crown, now Melco Resorts and Entertainment.
But when you take the $1.7 billion Crown made from selling out in Macau, the figures tell a very different story.
Crown, which welcomed James Packer back to the board after a two-year hiatus on Thursday, said on Friday that normalized profits (profits excluding one-off items) were down 10 per cent from the previous year to $343.1 million.
Overall revenues, meanwhile, were down 5.5 percent year-on-year, to $3.34 billion.
High Roller Drought
The drop in revenues is largely a result of the drying up of the stream of Chinese VIPs, following the imprisonment in China of Crown Resorts staff. Crown said VIP revenue was down 39.7 percent on the previous year.
Crown did not want to talk about China during Friday’s earnings call and is awaiting the results of an internal report on the situation. It preferred, instead, to talk about “difficult trading conditions.”
The arrests forced the company to scale down its international ambitions and halt its VIP marketing operations in the China region.
As well as pulling out of Melco Crown, it abandoned involvement in the Alon project on the Las Vegas Strip, as it sought to reduce risk and concentrate on its core Australian assets, its Barangaroo casino project in particular.
Tabcorp Posts Loss Pursuing Tatts
Meanwhile, Tabcorp also released its financial report in Friday. The betting giant has spent the year in hot pursuit of an $11 billion merger with Tatts and it showed in its results. Tabcorp spent $54 million on merger related costs, which dragged it into the red for the year, The company reported a net loss of $20 million compared with a $169 million net profit the year previously.
“The combination is expected to deliver at least AU$130 million ($103 million) per annum … from synergies and business improvements,” Tabcorp CEO David Attenborough reassured investors. “When you put that sort of number on the table, then what we’ve spent so far is not a big bet for the benefit it will bring.”
And Tabcorp is confident the deal will go through. Attenborough said he expected the combination to be finalized in December, despite the fact that the Australian Competition and Consumer Commission has initiated a judicial review of the deal that could potentially stop it in its tracks.