Casino Operator Crown's Profit Falls, Hurt by Echo Investment
02/21/2013| 06:39pm US/Eastern
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By Gavin Lower
MELBOURNE--Crown Ltd. (>> Crown Limited), the casino operator controlled by billionaire James Packer, said Friday its first-half net profit fell 34%, hurt by its investment in rival casino Echo Entertainment Group Ltd. (>> Echo Entertainment Group Ltd).
Net profit for the six months to Dec. 31 was 180.8 million Australian dollars (US$186 million) compared with A$274.4 million last year. That result included a A$52 million hit caused by a drop in Echo's share price over the period, Crown said.
Stripping out significant items, Crown's underlying profit rose 15% to A$243.5 million, slightly above the A$238.5 million median of seven analysts' forecasts compiled by Dow Jones Newswires.
Crown is spending heavily on improving its Melbourne and Perth casinos as it vies with regional rivals in Singapore and Macau for big-spending Asian gamblers. It's also seeking New South Wales state government approval for a new luxury hotel and VIP casino in Sydney.
The proposed Sydney development at the A$6 billion harborside redevelopment site known as Barangaroo needs government support as Echo Entertainment has an exclusive right to run a casino in Sydney until 2017.
Crown has applied to regulators to be allowed to increase its stake in Echo to up to 25%, prompting some analysts to predict the company could make a takeover bid.
Crown also holds a 33.6% stake in Macau casino owner Melco Crown Entertainment Ltd. (>> Melco Crown Entertainment Ltd (ADR)), which is planning to build a new A$2.9 billion casino resort called Studio City in Macau and a casino resort in Manila in the Philippines.
Crown said it would pay an interim dividend of 18 Australian cents a share, the same as last year.
Write to Gavin Lower at gavin.lower@wsj.com
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