Crown Perth a shining light for embattled casino operator
The impact of Crown Resorts’ Perth venue on the operator’s portfolio has been highlighted by the release of FY21 results.
Business News Australia reports that while much of the attention at Crown Resorts has been surrounding the findings of the NSW Bergin inquiry and two royal commissions in Victoria and Western Australia, the financial results show not only the impact of lockdown on the casino operator, but also the value of Crown Perth to the business.
The group reported a $261.6 million loss for FY21, and even its theoretical profit before closure costs and significant items is negative at $84.2 million in the red.
Crown saw a 77.4 per cent decline in its earnings before interest, tax, depreciation and amortisation to $114.1 million, although that result would have been unlikely if it weren’t for a 50.4 per cent jump in earnings to $231.8 million at Crown Perth.
That operation received $24.7 million in JobKeeper subsidies compared to the $54.9 million received by Crown Melbourne.
It was a tale of two cities as Crown Melbourne reported an EBITDA loss of $100.6 million, compared to a profit of $381.8 million in FY20.
Gaming floor revenue slides
The operator’s main gaming floor revenue was down 54.3 per cent at $406.9 million and non-gaming revenue declined by a similar percentage to $171.2 million.
The group received proceeds of approximately $750 million from apartment sales at Crown Sydney, of which $450 million was used to repay a project finance facility.
The site at Barangaroo had its non-gaming sections opened to the public on December 28, but after four years of construction, the company is still awaiting a ruling from the NSW gaming regulatory to turn on its poker machines for the public.
Crown Resorts notched up $62 million in pre-opening costs for Crown Sydney, while other significant items included a $37.4 million underpayment of casino tax, $21.7 million in restructuring costs and a $12.5 million contribution as part of a deal with NSW regulators.
Crown’s chief financial officer Alan McGregor said the group’s full-year results reflect the severe impact on operations from the pandemic.
“Crown Melbourne’s gaming operations were closed for a large part of the financial year and, when open, facilities were subject to ongoing operating restrictions,” McGregor said.
“Conversely, Crown Perth delivered strong performance during the financial year.
“Crown Perth reopened with restrictions towards the end of June 2020 and remained open for the entirety of the first half, trading above expectations.
“Crown Perth had faced several short-term closures throughout the second half and while trading performance has rebounded quickly following each shutdown, overall performance moderated throughout the course of the year.”
Revenue from Crown Sydney apartment sales helps boost bottom line
McGregor noted Crown Sydney delivered an overall operating loss for the financial year given the impact of COVID-19 related restrictions, border closures anda the limited scale of operations.
“We are continuing to see good momentum in Crown Sydney apartment sales, with over $1 billion in gross sales and pre-sale commitments achieved to date, representing approximately 80 per cent of the apartments by number.
“Settlement of the apartment sales commenced in April 2021, with approximately $650 million in proceeds received during that period, allowing Crown to reduce outstanding debt and fully repay the $450 million project finance facility prior to year-end,” McGregor said.
McGregor emphasises pandemic-related restrictions continue to have an impact this financial year.
“Crown Melbourne has been closed for the majority of this financial year, while stay at home orders were imposed in Sydney on June 26, 2021 and remain in place,” he said.
“Crown Perth recommenced operations on July 6, following a short-term closure towards the end of June 2021 and is transitioning gaming and non-gaming activities to pre-lockdown conditions following the staged removal of remaining restrictions.