Crown Resorts feels impact of China downturn

Australian gaming operator Crown Resorts saw a huge drop in its online figures following its sale of CrownBet.

The Betfair Australia owner said total revenue during the six months to December 31 from its Crown Digital division was down 65.6% year-on-year to Aus$65.9m (€41.6m/$47.2m).

Last year’s comparable period included takings from its 62% share in CrownBet, which was sold to a consortium led by the brand’s founder Matthew Tripp for Aus$150m at the end of February 2018.

Crown Digital, which also includes online social gaming business DGN Games, had seen revenues grow by 24.6% between H1 2017 and H1 2018.

Crown’s digital division is a minor part of its overall operation, which is primarily focused on its casino resorts in major cities across Australia and its Aspinall’s venue in London.

Australian resorts normalised revenue was at Aus$1.54bn, down 1.2% year-on-year. While main floor gaming revenue was up 0.9% to Aus$867.7m, VIP program play was down 12.2% to Aus$19.9m.

Crown Resorts executive chairman John Alexander said the VIP decline was in the main due to softer economic conditions in China and a crackdown on conspicuous consumption in the world's biggest economy that has also affected Macau and Singapore.

EBITDA from Crown Digital was Aus$7.5m, down 14.7% year-on-year following the sale of CrownBet, with normalised EBITDA down 6.5% to Aus$418.8m. The digital segment’s expenses were down 68.1% to Aus$58.4m.

Total operating expenses were at Aus$1.22bn which was down 9.0% from Aus$1.34bn. with corporate costs increasing 10.1% to Aus$27.4m.

Income tax paid was flat at Aus$83.4m while finance costs fell 41.5% to Aus$24.0m. Net profit after tax fell 30.1% to Aus$174.4m.

Crown Resorts’ total net operating profit after tax was up 0.9% to Aus$194.1 million.

Alexander said: “Crown’s Australian operations’ first half result reflected mixed trading conditions. Total normalised revenue across Crown’s Australian resorts decreased by 1.2% on the prior comparable period.

“Main floor gaming revenue increased by 0.9%, with modest revenue growth in Melbourne offset by continued softness in Perth.

“VIP program play turnover across Crown’s Australian resorts of Aus$19.9 billion was down 12.2% after a soft November and December.” Crown shares fell 5.4% on Wednesday to Aus$11.54, and are down 7.6% over the past 12 months, versus a 2.5% rise in the broader market.”

After being sold by Crown, CrownBet, which is backed by The Stars Group, acquired William Hill’s Australian business for Aus$244m and rebranded as BetEasy.