AAP Finance

Crown profit falls on Chinese VIP downturn

By AAP Newswire

Crown Resorts' full-year profit has fallen 4.7 per cent to $368.6 million, with the casino operator citing a big drop in revenue from visiting Chinese high-stakes gamblers.

Normalised profit for the 12 months to June 30 dipped on a 5.4 per cent fall in Australian revenue that chairman John Alexander said came against a backdrop of subdued market conditions.

Rival casino operator Star Entertainment Group last week also cited a drop in international VIP spending while reporting an 8.4 per cent fall in full-year profit.

Crown's main floor gaming revenue in Australia inched up 0.5 per cent to $1.6 billion despite a 2.1 per cent drop in Perth but turnover from high-stakes VIP program play slumped 26.1 per cent to $38 billion.

Crown held its final dividend at 30 cents but the amount franked fell to 25 per cent from 60 per cent a year ago, which the firm says reflects its franking balance and uncertainty surrounding the outcome of its legal battle with the Australian Taxation Office over historical tax deductions.

While Crown acknowledged the proceedings and the regulatory attention following allegations of links between junket operators and organised crime, Mr Alexander railed at "recent media reporting which has unfairly sought to tarnish Crown's reputation".

"It comes as no surprise that various regulators and other agencies have launched inquiries given recent media reports and the sensationalist nature of the allegations raised," Mr Alexander said on Wednesday.

"Crown has zero tolerance for criminal elements and we view these inquiries as an opportunity to continue our co-operation with regulators and other agencies."

Crown said it would co-operate with the Victorian Commission for Gambling and Liquor Regulation as it looks into media allegations related to business ties between the Crown Melbourne casino and organisations linked to Chinese criminals.

Crown has already defended its due diligence of the junket operators that bring Chinese gamblers through its doors amid media allegations of money laundering and dodging Australian visa application requirements for wealthy clients.

It also reiterated on Wednesday it was co-operating with an inquiry by the NSW Independent Liquor and Gaming Authority that followed the sale of a near 20 per cent stake in the company by major shareholder James Packer to Lawrence Ho's Melco Resorts.

The company is subject to an Australian Criminal Intelligence Commission investigation and the federal government has referred the matter to the Australian Commission for Law Enforcement Integrity.

Including fluctuating win rates and other one-off items, Crown's statutory profit fell 28.1 per cent on the prior year, which included both higher revenue and the impact of asset sales.

At 1240 AEST, Crown shares were down 0.26 per cent at $11.45.

CROWN FY PROFIT DIPS

* Normalised revenue down 9.9pct to $3.17b

* Normalised profit down 4.7pc to $368.6m

* Net profit down 28.1pct to $402.9m

* Final dividend 30 cents, 25pct franked (60pct franked in pcp).