Crown scraps dividend after 80pc profit plunge
The James Packer-backed Crown Resorts is hopeful people will return to casino resort properties in the aftermath of the COVID-19 pandemic.
The James Packer-backed Crown Resorts is hopeful people will return to casino resort properties in the aftermath of the pandemic and confident its balance sheet can support the ongoing closure of its flagship Melbourne complex, despite reporting an 80 per cent slump in annual profit.
The casino major said it was still targeting December to start opening its new $1.7bn casino at Sydney’s Barangaroo precinct.
Crown scrapped its final dividend and secured a wavier of its banking covenants after its net profit fell to $79.5m and revenue fell 25 per cent to $2.2bn following the forced closure of its casinos in Melbourne and Perth.
Crown’s stated dividend policy is to pay 60c a share, which delivers its major shareholder James Packer a $73m payment every six months, but the company said on Wednesday that the final dividend would not be paid given the impact on its businesses from the mandatory closures and the uncertainty surrounding the resumption of trading at Crown Melbourne.
Earlier this year, Crown controversially paid its interim dividend despite standing down the majority of its workforce and applying for the federal government’s JobKeeper program.
Crown revealed on Wednesday that it recorded $43.4m in payroll subsidies to June 30 for employees that continued to work in either a full or partial capacity and $67.9m in JobKeeper payments for the same period for staff that were stood down.
“We want to be able to bring people back at very short notice. We want to keep people on our payroll and find ways not to force them to go to other places. Once the restrictions are eased we will be able to start operating again in very short order,’’ said chief executive Ken Barton.
VIP program play turnover fell 46.5 per cent in the half to $20.4bn, while Crown incurred closure costs of $81.6m, which included costs incurred during the mandated closure of Crown’s properties and investments, and significant items of $78.7m, relating to the impairment of its Crown Aspinalls and Nobu restaurant chain investments.
But Mr Barton said no impairments were being considered for the group’s Melbourne and Perth properties.
“I don’t think anyone would pick the results we have delivered as reflective of the potential of Melbourne,’’ he said.
At the end of June Crown Perth restarted gaming and the operation of most of its food and beverage facilities.
“Nothing would suggest people have changed their mind about going out, they just need the opportunity to do it again. What we have seen in Perth and other markets is a testament to that. It does seem as though people, once given the opportunity to go back to the casino, will go back (at) the level commensurate with before COVID and even above,’’ he said.
“Once restrictions ease, we have enough data points to suggest people will want to come back.”
Crown shares closed up 3.2 per cent to $9.80.
Crown reiterated the hotel at the new Sydney site would open from December as planned after the 275-metre hotel tower reached the significant “Topping Out” milestone in May, marking the completion of vertical construction.
Mr Barton said some of the podium gaming facilities would open in December but that its expectations for international VIP revenues were low given the ongoing restrictions on international travel.
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