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Crown Resorts' gamble on Macau fails to pay up big

Business

Crown Resorts’ first half-net profit has lifted only slightly after weak market conditions in Macau affected its joint-venture casino resorts there.

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Crown’s share of profits from the Macau resorts fell 89 per cent to $9.4 million.

But revenue from main-floor gaming at Crown’s Australian casino resorts increased by 9.8 per cent to $861 million.

Turnover from VIP gamblers fell 3.8 per cent to $35.7 billion.

Shares in Crown had plunged by 99 cents, or 7.9 per cent, to $1156 at 10.52am AEDT.

Crown, which operates the Crown casinos in Melbourne and Perth and which has joint-venture casinos in Macau and Manila operated by Melco Crown Entertainment (MCE), on Thursday reported a 1.6 per cent lift in net profit for the six months to December 31 to $205 million.

Normalised net profit, which excludes one-off items and variations in the theoretical win rate against high-rolling gamblers, fell 34.8 per cent to $210.3 million.

Crown chief executive Rowen Craigie described the performance of Crown’s businesses as mixed.

He said main-floor gaming in Australia was solid, and VIP turnover was reasonable given the strong growth in the prior corresponding period and the depressed nature of VIP gambling across Asia.

The decline in MCE’s result was attributable to weak conditions in Macau, Craigie said.

“Overall, gross gaming revenue across the Macau market in the half-year to 31 December 2015 declined by more than 30 per cent,” he said.

But Craigie said the payment by MCE to Crown of a $US120 million special dividend highlighted MCE’s strong cash position.

AAP

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