27/08/2009 - 09:56

Burswood's strength carries Crown

27/08/2009 - 09:56

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Gaming group Crown posted a loss of $1.2 billion FY2009 after writing down the value of its US assets due to the downturn but says it will focus on its Australian and Macau assets following strong performances from its Burswood and Crown casinos.

Gaming group Crown posted a loss of $1.2 billion FY2009 after writing down the value of its US assets due to the downturn but says it will focus on its Australian and Macau assets following strong performances from its Burswood and Crown casinos.

Crown made a net loss of $1.19 billion for the year ended June 30, compared to a $3.54 billion profit in the previous financial year.

The result came after Crown wrote down the value of its "ill timed" North American investments by $1.44 billion.

"The global financial crisis has had a major adverse impact on the North American casino industry leading to a requirement to write down the carrying value of Crown's investments in these markets," chief executive Rowen Craigie said on Thursday in a statement.

"In this context, Crown's investments in North America were ill timed."

Mr Craigie said despite the writedown on the US assets, Crown had one of the strongest balance sheets of any gaming company in the world.

"Crown's capability and financial strength places it in a strong position for the future," Mr Craigie said.

"Our principal efforts over the next 12 months will be to further enhance Crown's Australian operations and work closely with our joint venture partners to optimise the value of our Macau and other overseas investments."

Mr Craigie said Crown remained "excited" about the prospects for its Melco Crown investment in Macau, and the City of Dreams and Altira casino and resort projects.

"Current developments point to the resumption of growth in the overall Macau gaming market," he said.

"Recent trends in gaming activity at the newly opened City of Dreams property have been encouraging."

He said Crown's wholly-owned Australian casinos, Crown Melbourne and Burswood, had performed well in 2008/09 despite a challenging economic environment.

Both casinos are mid-way through major refurbishment and expansion programs.

"Crown Melbourne and Burswood have both made a solid start to the new financial year and the outlook for both properties is positive," Mr Craigie said.

At Burswood in Perth, EBITDA rose 6.8 per cent to $208.7 million, as revenue lifted 6.5 per cent to $697.6 million.

Main floor gaming revenue grew 7.4 per cent to $397.9 million while normalised VIP program play revenue increased 11.5 per cent to $140.0 million on record turnover of $10.4 billion.

"Main floor gaming revenue growth at Crown's wholly owned Australian casinos, Crown Melbourne and Burswood, continues to be solid," the company said.

In the first seven weeks of trading in 2009/10, main floor gaming revenue across both properties grew about five per cent on the previous corresponding period.

Meanwhile, Crown said its normalised result for 2008/09 was a net profit of $280.7 million, after excluding one-off items and the impact of VIP win rates.

Group revenue was $2.26 billion, an increase of two per cent.

Its Australian operations produced normalised revenue growth of 6.8 per cent to $2.16 billion and earnings before interest, tax, depreciation and amortisation (EBIDTA) of $619.6 million, up 5.2 per cent.

Crown Melbourne's normalised EBITDA rose 3.9 per cent to $450.3 million, after main floor gaming revenue grew 6.7 per cent to $855.3 million.

Normalised VIP program play revenue increased 14 per cent to $329.7 million on record turnover of $24.4 billion, primarily achieved in the first half of 2008/09.

Crown noted that it had written down to nil the value of its minority US investments - namely Fontainebleau, Stations and Harrahs - and its Canadian investment.

It also noted it had net debt at June 30 of $541.7 million and gearing of less than one times EBITDA.

Crown declared a final dividend of 19 cents, down from 29 cents in the previous corresponding period, taking the total for the year to 37 cents.

"Going forward, it will be Crown's policy to pay the higher of 37 cents per share and 65 per cent of normalised NPAT as a full year dividend, subject to the company's financial position," it said.

"Crown expects that the dividend will trend to 65 per cent of normalised NPAT over time."

Crown total 2008/09 dividend payout represented 100 per cent normalised net profit.

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