Casinos operator Crown Resorts has posted a full-year profit of $558.9 million, down 70 per cent on a 2016/17 result that was inflated by proceeds from the sale of its Macau business.
Despite the fall, normalised profit – which adjusts for the impact of large wins and losses and excludes significant items including asset sales – rose by 14 per cent to $385.6 million.
Revenue was also up for the 12 months to June 30, rising 4.5 per cent to $3.49 billion, with turnover in its VIP high-roller gambling business growing by 54.5 per cent to $51.5 billion.
The boost in VIP play at Crown’s casinos in Melbourne and Perth was a “pleasing result”, executive chairman John Alexander said in a statement on Thursday.
“Particularly at Crown Melbourne … given the difficult trading conditions in the previous corresponding period.”
Normalised VIP program play revenue was up by 73.9 per cent at the company’s flagship Melbourne casino to $591.8 million from a gambling turnover of $43.8 billion.
The rise follows a 49 per cent drop in VIP turnover the previous financial year, after many Chinese high-rollers put off overseas gambling jaunts amid a Chinese government crackdown on gambling and advertising.
The crackdown also led to the detention in late 2016 of Crown employees in China over alleged gambling offences and ultimately drove the company’s subsequent sale of its Macau casino business.
In a call to analysts, Mr Alexander said the casino was relying more on an “increasing volume” of third-party junket operations to bring VIPs to its casino following the China arrests.
The company has not had a sales force on mainland China since the detentions.
It as also the first financial year the company disclosed the operating revenue figures for its main floor tables and gaming machines, with the former generating $966 million in revenue and the latter $715 million.
At Crown Melbourne, gaming machine revenue growth was flat at $449.9 million.
Mr Alexander said the sector had experienced “strong growth at the back end of the financial year” but could have been impacted by the casino’s voluntary money and time limit setting program PlaySafe.
Crown was fined $300,000 in April for modifying poker machines without approval and hiding certain buttons on 17 gaming machines
During 2017/18, Crown also sold assets including land in Las Vegas after abandoning plans for casino, a stake in gaming giant Caesars Entertainment, and a 62 per cent interest in bookmaker CrownBet.
The sales added about $232.2 million of the company’s profit after tax.
Crown has declared a final dividend of 30 cents per share, franked at 18 cents.
The company also announced a new share buyback for $400 million of shares to replace its current ongoing share buyback that ends on August 22.
At 1424 AEST, Crown shares were up 70 cents, or 5.3 per cent to $14.02 – a three-and-a-half year high.
VIP GAMBLERS RETURN, BUT PROFIT DOWN FOR CROWN
* 2017/18 net profit after tax down 69pct to $573.2m
* Normalised net proft after tax up 12.7pct to $386.6m
* Revenue up 4.5pct to $3.49b
* Final dividend 30 cents, franked at 18 cents