Australian casino operator Crown Resorts Ltd has posted a 22.7 percent decline in normalized net profit for the full year, pulled down by its Macau operations.
Normalized net profit for the company was A$406.2 million for the 12 months ended June 30, down from A$525.5 million a year before.
The operator, which is majority owned by billionaire James Packer, saw earnings slide in its Asia operations, with its share of profits in its two Melco Crown casinos in Macau and Manila down 64 percent to A$58 million in 2015.
“Macau continues to face challenges arising from softer gaming demand, which has adversely affected all casino operators,” said Crown in a statement.
In a statement to Sydney Morning Herald, Crown’s chief executive said while he doesn’t see VIP levels in Macau returning to levels three or four years ago, he believes there are some “green shoots” emerging.
“Macau is a long-term investment. We’re very comfortable about having a presence – it’s still the largest gambling market in the world by a long stretch.”
“Melco Crown believes that revenue trends, particularly in the mass market segments, will improve as Macau further evolves into a multi-faceted, mass-market-focused destination,” said the company.
Main floor revenue increased 5.8 percent and VIP revenue was down 8 percent.
While “normalized” net profit is a measure used by casino companies to take out irregularities in win rates, it is worth noting “actual” net profit of the company jumped 146.4 percent, due to the sale of its shares in Melco Crown, which raked in an extra A$602 million for the company.
Earlier this week, Crown reported it had received positive feedback from regulators and government in its push to separate its Australian operations from its Macau business.
Crown first announced in June it would be looking to break up its casino businesses, separating Crown Resorts from its underperforming international arm Melco Crown Entertainment.
According to the Australian Financial Review, negotiations have begun with authorities, which could be finalized as soon as the end of the year.
“I would describe that work so far as reasonably positive,” Crown chief executive Rowen Craigie said. “It is only quarter time in a six to nine-month process but so far the response from government and regulators has been positive.”
A property trust covering Crown’s Australian hotel rooms floated on the ASX may be worth $2 billion. Crown would retain a 49 percent stake. However, the move is still subject to approval of the Crown board.