Packer’s strategy at work
In its full-year results for the year ending in June, Australian casino operator Crown Resorts Ltd. reported net profits of A$948 million (US$727.7 million), an increase of 14 percent over 2015.
According to SBC News, Crown’s results were propped up by its A$602 million ($US 462 million) sell-off of shares in Melco Crown Entertainment, Crown’s joint venture in Macau. Crown, run by Aussie billionaire James Packer recently reduced its shareholder equity from 37.3 percent to 27.4 percent.
Without the divestment, Crown noted in its regulatory filing, the firm would have posted adjusted full-year net profits of A$406 million, down 22.7 percent.
“The 2016 full-year result reflects a solid performance from our Australian operations and continued subdued trading in Macau,” Crown Chief Executive Rowen Craigie said in a statement on the company’s website.
Crown insists it’s still committed to its Macau projects, and says Macau still represents a “long-term investment” for the company. Bloomberg News reported that the Melbourne-based firm acted to “shield Packer’s Australian assets from a prolonged downturn in the Chinese gambling hub.”
Crown has acknowledged as much. “Macau continues to face challenges arising from softer gaming demand, which has adversely affected all casino operators,” the company said in a statement, adding that work continues to finalize the demerger.
Crown has also said it would explore an initial public offering of 49 percent of a property trust holding some of its Australian hotels; Crown is still evaluating that IPO, the company confirmed last week. Any additional spinoff would split off Crown’s Las Vegas venture, a 20 percent stake in Japanese restaurant Nobu and half of U.K. casino operator Aspers Group. After the split, Crown would hold gambling resorts in Melbourne, Perth and a planned luxury hotel-casino in Sydney, Bloomberg reported.
