Shake-up at Australia’s Crown as high-rollers cash out

AFP, SYDNEY: Australian casino operator Crown Resorts announced a sweeping restructuring  yesterday in a bid to rebound from a gambling crackdown in China and tumbling demand from high rollers.
Mogul James Packer's firm saw a sharp drop in demand in its Macau business and slashed its stake in a joint venture there after 18 of its staff were held in China accused of organising gambling activities overseas for rich Chinese, which is not allowed.
Crown signalled it was further retreating from its international operations to focus on its domestic luxury hotel and casino business, despite slumping turnover from VIPs at its Australian resorts.
It also announced a management shake-up that ends the tenure of its chief executive of 10 years, Rowen Craigie.
"This new structure will ensure that for the near term, there is a major focus on the performance of Crown's key Australian operations," said executive chairman John Alexander, who will take over Craigie's responsibilities.
Alexander also announced an "efficiency drive" to review all operations and try and boost the profitability of its Australian resorts amid "difficult trading conditions", without elaborating.
The Australian reported that Crown is planning to slash hundreds of jobs from its 14,000 workforce over the coming months.
Crown will pay a special dividend and is forging ahead with a $500 million share buyback.
Investors responded, with Crown Resorts up 0.9 cents, or 7.9 percent to $12.29 at the Thursday close of the Australian Securities Exchange.
In December the company agreed to the sale of a 13.4 percent stake in Melco Crown Entertainment for $1.6 billion to joint-venture partner Melco International.
The sell-off in the Macau venture reduced its holdings to 14 percent, with the gaming operator also shelving plans for a Las Vegas casino.
The detained Crown staff members remain in China, where gambling is illegal.
The group, including three Australians, was picked up in October on suspicion of arranging junkets overseas for wealthy Chinese gamblers.
Crown is still seeking information on the arrests.
"We have no greater clarity. We have to wait for those legal processes to take their course... We are all in the hands of the Chinese legal process," Alexander said.
Mainland China represents less than half of Crown's VIP customer base, Alexander said. The other half is shared between Singapore, Malaysia, Indonesia, Hong Kong and other parts of North Asia, he said.
Crown reported a sharply higher 
second-half profit Thursday after its Macau sale helped offset a 45 percent drop to $19.6 million in turnover from high rollers visiting Australia.
The firm posted a net profit of Aus$359 million (US$276 million) for the six months to December 31, up 75 percent on the corresponding period in 2015.
However, excluding significant items, normalised net profit fell 9.1 percent to $191.3 million.
Total revenue across the company's Australian resorts declined 12.5 percent to $1.4 billion.

Shake-up at Australias Crown as high-rollers cash out

AFP, SYDNEY: Australian casino operator Crown Resorts announced a sweeping restructuring yesterday in a bid to rebound from a gambling crackdown in China and tumbling demand from high rollers. Mogul James Packers firm saw a sharp drop in demand in its Macau business and slashed its stake in a joint venture there after 18 of its staff were held in China accused of organising gambling activities overseas for rich Chinese, which is not allowed. Crown signalled it was further retreating from its international operations to focus on its domestic luxury hotel and casino business, despite slumping turnover from VIPs at its Australian resorts. It also announced a management shake-up that ends the tenure of its chief executive of 10 years, Rowen Craigie. This new structure will ensure that for the near term, there is a major focus on the performance of Crowns key Australian operations, said executive chairman John Alexander, who will take over Craigies responsibilities. Alexander also announced an efficiency drive to review all operations and try and boost the profitability of its Australian resorts amid difficult trading conditions, without elaborating. The Australian reported that Crown is planning to slash hundreds of jobs from its 14,000 workforce over the coming months. Crown will pay a special dividend and is forging ahead with a $500 million share buyback. Investors responded, with Crown Resorts up 0.9 cents, or 7.9 percent to $12.29 at the Thursday close of the Australian Securities Exchange. In December the company agreed to the sale of a 13.4 percent stake in Melco Crown Entertainment for $1.6 billion to joint-venture partner Melco International. The sell-off in the Macau venture reduced its holdings to 14 percent, with the gaming operator also shelving plans for a Las Vegas casino. The detained Crown staff members remain in China, where gambling is illegal. The group, including three Australians, was picked up in October on suspicion of arranging junkets overseas for wealthy Chinese gamblers. Crown is still seeking information on the arrests. We have no greater clarity. We have to wait for those legal processes to take their course... We are all in the hands of the Chinese legal process, Alexander said. Mainland China represents less than half of Crowns VIP customer base, Alexander said. The other half is shared between Singapore, Malaysia, Indonesia, Hong Kong and other parts of North Asia, he said. Crown reported a sharply higher second-half profit Thursday after its Macau sale helped offset a 45 percent drop to $19.6 million in turnover from high rollers visiting Australia. The firm posted a net profit of Aus$359 million (US$276 million) for the six months to December 31, up 75 percent on the corresponding period in 2015. However, excluding significant items, normalised net profit fell 9.1 percent to $191.3 million. Total revenue across the companys Australian resorts declined 12.5 percent to $1.4 billion.