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Lockdowns, inquiries drag Crown to FY loss

Crown. Photo: Facebook/ Crown Hotels.

Crown Resorts has slid to a $261.6 million full year loss as the embattled company awaits the fate of its biggest casino in Melbourne.

The gaming group, which managed to deliver a $79.5 million profit a year earlier, lost ground as coronavirus-related restrictions hit operations at its key properties and a jump in restructuring and regulatory costs weighed on its finances.

Revenue for the 12 months to June 30 tumbled 31 per cent to $1.54 billion, and the James Packer-backed group said shareholders would not receive any dividend for the year.

By 1330 AEST, Crown shares were down 1.3 per cent to $9.20 each.

Crown is currently awaiting a decision on the gaming license for its flagship Melbourne casino, after a royal commission heard allegations of money laundering and repeated breaches of gambling laws. A judgement is expected by October 15, with the outcomes ranging from a state-supervised management overhaul to loss of licence.

Crown is facing another royal commission in Western Australia as well as the fallout of NSW’s Bergin inquiry, which found it was “not suitable” to run a newly built casino in Sydney due to its poor track record in Melbourne.

The regulatory troubles have already led to a clean out of its board and the loss of its CEO and chair. They have also weighed heavily on its results, with corporate costs spiralling to $111.6 million, on the back of higher legal and compliance expenses associated with the various inquiries, and higher insurance premiums. 

At the same time, the company has also been buffeted by the pandemic, with its cash cow Melbourne property shut for nearly half of the year due to COVID lockdowns and gaming activities repeatedly suspended at the Perthand UK casinos.

Crown said the closures had cost it $120.6 million over the year.

Earnings at Melbourne slid nearly 80 per cent, while the Perth casino recorded a jump of 57 per cent. Its Sydney business recorded a loss of $23 million, largely on account of heavy pre-opening costs. 

Incoming CEO Steve McCann, who will assume the role after completing the standard probity checks, said the company’s challenges would continue for some time.

“We’re under no illusion as to the scale of the task ahead. The significantly refreshed board and leadership team are committed to setting the standard expected of all of our employees, right across the organisation,” he said on an investor call.

Last week Crown announced former NBN boss Dr Ziggy Switkowski would be the new chairman after Helen Coonan stepped down from the role.

On Monday, Crown said it has tied up funding with banks in return for suspending dividend payments until at least December 2021, and potentially longer if its casino licences in Victoria or WA are revoked by royal commissions in either state.

Prashant Mehra – Australian Associated Press

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