Australian regulator gives Crown split-up plan a positive

TAGs: Australia, crown resorts, Leonard Postrado, Rowen Craigie

It was a break-up that almost everyone is approve of – and we are not talking about Australian billionaire James Packer’s love life.

Australian regulator gives Crown split-up plan a positiveAustralian state regulators and credit analysts have given the plan of Australian casino operator Crown Resorts to separate its solidly performing Australian operations from the struggling Macau business a positive feedback, according to The Australian Financial Review.

Crown chief executive Rowen Craigie confirmed that the negotiations between the casino operator and the Australian government on its plans to split its “high-performing” Australian assets and its international business and to create a property trust could see a positive conclusion as soon as the end of this year.

The domestic business of Crown includes its Melbourne, Perth, Sydney and Aspinalls casinos while its international arm houses 27 per cent stake in Macau-focused Melco Crown Entertainment.

“I would describe that work so far as reasonably positive,” Crown chief executive Rowen Craigie said. “It is only quarter time in a six to nine-month process but so far the response from government and regulators has been positive.”

On Wedneday, Crown announced that it raked a AU$948.8 million (US$730 million) net profit for the year ended June 30, thanks to the AU$602 million (US$459.55 million) gain from selling down Crown’s stake in its Macau casino business Melco Crown Entertainment (MCE) in May.

But excluding the stake sale, the earnings slide more than offset steady returns from Crown’s Australian casinos and saw the company’s normalized profit, which excludes one-off items and variations in the theoretical win rate against high-rolling gamblers, slump 22 per cent to $406.2 million (US$310.08 million).

To the surprise of many analysts, Crown declared a final dividend of AU$0.395 per share, partially franked, to be paid on October 7. Citi analyst Rohan Sundram​ predictsa robust 2017 earnings, thanks to the opening of a new hotel at Crown’s Perth later this year and “profitability ramp up for CrownBet,” the corporate bookmaker Crown has a 62 per cent stake in.
Craigie, for his part, wants to manage everyone’s expectation of the business.

He pointed out that the sluggish economic conditions in Western Australia will greatly affect the performance of its Perth casino. Crown’s chief also mentioned about the on-going legal action broughtby activist group Millers Point Fund in Sydney regarding Crown’s planned $2 billion Barangaroo casino and hotel.

Mr Craigie said work would continue on the project, now slated to open in the first half of 2021, with a hearing on the matter now set for late November.


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