For the six months ending Dec. 31, Crown’s earnings fell 15.5% while net profit after tax fell 31.4% to A$262.4m (US $205m). That’s before $61.3m in significant items, including costs associated with the aborted Crown Sri Lanka project. Including those numbers, profit fell a whopping 47.2% to $201.8m.
However, Aussie casino operators prefer to report ‘normalized’ numbers, which smooth out the wild variance in the VIP gambling market and other occasional hiccups. Employing those normalized rose-tinted glasses, revenue rose 17.2% to $1.7b, earnings rose 14.8% to $450.2m while profits rose 2.3% to $322.4m. There, that’s better, isn’t it?
Maintaining that normalized facade, Crown’s domestic casinos saw revenue rise 16.1%. Main gaming floor revenue rose 3.5%, non-gaming revenue rose 2.4% while VIP gambling turnover rose a hefty 61.4% to $37.1b.
Crown Melbourne reported normalized earnings up 26.1% to $351.2m thanks to an 86.4% rise in VIP revenue. VIP turnover set new records in November and December as high-rollers looked for somewhere other than Macau to test their luck. Crown Perth’s earnings rose 7.7% to $127m as main floor revenue rose 3.7% and VIP rose 1.2%.
In a demonstration of how illusory ‘normalized’ numbers can be, Crown Aspinall’s normalized earnings rose 17.8% to $20.7m although actual earnings were negative $3.5m. Frankly, we wouldn’t be surprised to learn there’s someone out there who believes Seattle won the Normalized Super Bowl.
In Macau, Crown’s one-third stake in the Melco Crown Enterainment joint venture dragged even normalized profits down 21.5% to $110.4m.
Crown’s online betting operations produced negative earnings of $5.2m in H1. In August, Crown paid $10m to assume full control of Betfair Australia, then morphed the business into a joint venture – two-thirds owned by Crown – with Matthew Tripp’s BetEasy.
Crown says it hopes planning approval for the oft-delayed Crown Sydney project will be “resolved shortly.” In the meantime, Crown is teaming with the Schiavello Group on a plan to build a new five-star hotel adjacent to Crown Melbourne. In December, Crown paid $50m for a 50% share of the land on which the hotel will stand. The parties will share the development costs 50/50, but Crown has the right to acquire and manage the hotel upon completion.
At Crown Perth, the new Crown Towers is on schedule for completion by December 2016. The $645m project will feature 500 luxury hotel rooms, private gaming salons, a grand ballroom, restaurants and ritzy retail outlets.
Crown also announced it had extended the contract of CEO Rowen Craigie for a further three years. That is, unless those are normalized numbers, and he was actually fired six months ago.