Crown Resorts Records Increasing Losses In First Half Of Fiscal Year

Crown Resorts, the biggest owner and operator of land-based casinos in Australia, has recorded widening losses in the first half of the 2021-2022 fiscal year, even though its revenue recorded an increase.

Crown Resorts announced that its revenue for the six-month period to December 31 2021 was 780.9 million Australian dollars, which represents an increase of 34.4 percent compared to the first half of the previous fiscal year.

However, the company’s losses also increased, the overall net loss for the half-year came to 196.3 million Australian dollars, a whole 75 million more than the amount the corporation lost in the first half of the 2020-2021 fiscal year.

Most of the Australian company’s revenue was generated by Crown Perth, which produced 402.9 million Australian dollars. However, that figure still represented a decrease of 1.5 percent year-on-year. Crown Perth had the least amount of closures during the first half of the fiscal year compared to the other venues operated by Crown Resorts, the Perth casino was closed for just a few days at the beginning of July 2021.

Crown Melbourne, on the other hand, was closed for no less than 96 days, and that resulted in revenue of just 265 million Australian dollars for the first half of the fiscal year. Nevertheless, that represented a huge increase of 172.9 percent year-on-year.

Crown Sydney was the worst performing venue in Australia, it made just 36.1 million Australian dollars as its casino was not open at all during this period since Crown Resorts still doesn’t have a gambling license in New South Wales.

The Australian company is set to change ownership in the very near future as the board of directors has decided to accept the latest takeover bid from Blackstone Group, a powerful private equity firm.

The bid is worth 8.9 billion Australian dollars, with Blackstone paying 13.10 in cash per share. The negotiations between the two parties started in March 2021, when Blackstone offered a price of 11.85 Australian dollars cash per share to take over Crown Resorts. That bid was rejected and later the private equity group came up with an improved bid, offering 12.35 dollars per share, but that was turned down as well.

Blackstone already owns 9.9 percent of Crown Resorts, a stake that was acquired from Melco Resorts & Entertainment Limited, the Asian gaming group, in April 2020. The price per share at that time was just 8.15 dollars. The Crown Resorts shareholders will hold a meeting and a vote on the takeover deal in the second quarter of 2022. Australian billionaire James Packer, who owns 37 per cent of the company, will receive around 3.26 billion dollars from the sale.

Source: “Covid disruptions widens Crown Resorts 1HFY22 net loss to A$196.3 million“. Asia Gaming Brief. February 17, 2022.