CROWN RESORTS -
Crown Resorts Limited performance:
Normalised1 NPAT attributable to the parent of $210.3 million, down 34.8%
Reported NPAT attributable to the parent of $205.0 million, down 22.1% before significant items
Reported NPAT attributable to the parent of $205.0 million, up 1.6% after significant items
Normalised EBITDA of $424.4 million, down 5.7%
Reported EBITDA of $455.9 million, up 12.7%
Normalised EBIT of $284.4 million, down 11.7%
Reported EBIT of $315.9 million, up 14.2%
Interim dividend of 33 cents per share declared2
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Australian resorts performance:
Normalised revenue of $1,695.7 million, up 4.2%
Main floor gaming revenue of $861.1 million, up 9.8%
Non-gaming revenue of $353.0 million, up 3.2%
VIP program play turnover of $35.7 billion, down 3.8%
Normalised EBITDA of $482.6 million, up 0.9%
Reported EBITDA of $509.5 million, up 11.5%
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Melco Crown Entertainment (MCE) performance:
Weak market conditions in Macau adversely impacted MCE's performance
Crown's share of MCE's Normalised NPAT of $37.2 million, down $73.2 million or 66.3%
Crown's share of MCE's Reported NPAT of $9.4 million, down $75.9 million or 89.0%
MCE has announced the payment of a special dividend on or about 16 March 2016. Crown's share of the special dividend will be US$120.0 million
MCE has also announced a review of its current dividend payout ratio of 30% of net income
1 Normalised results have been adjusted to exclude the impact of any variance from theoretical win rate on VIP program play (at Crown Melbourne, Crown Perth, Crown Aspinall's and MCE), pre-opening costs from MCE and asset impairments in the prior year. The theoretical win rate is the expected hold percentage on VIP program play over time. Accordingly, the normalised result gives rise to adjustments to VIP program play revenue, gaming taxes, commission and other expenses, income tax expense and equity accounted share of associates' results. Crown believes that normalised results are the best measure of viewing performance of the business as it removes the inherent volatility in VIP gaming revenue.
2 15 cents of the 33 cent dividend is subject to Crown receiving payment of the special dividend from MCE on or about 16 March 2016.
The Chief Executive Officer of Crown Resorts, Mr Rowen Craigie, said:
"The 2016 first half results across Crown's portfolio of businesses were varied."
"Main floor gaming revenue at our Australian resorts increased by 9.8% which was a solid performance. VIP program play turnover in Australia of $35.7 billion (down 3.8%) was a reasonable outcome given the strong growth in the prior comparable period of 61.4% and the depressed nature of the VIP program play market across Asia."
"The decline in MCE's result was attributable to weak market conditions in Macau. Overall gross gaming revenue across the Macau market in the half year to 31 December 2015 declined by more than 30%.
However the payment of a special dividend by MCE to Crown of US$120.0 million, highlights MCE's strong cash position and cash flow generating ability which has enabled MCE to return surplus capital to shareholders while still investing in MCE's business."
Normalised EBITDA from Crown Melbourne was $352.5 million, up 0.4% on the prior comparable period (pcp). Reported EBITDA for the period was $371.8 million, up 15.8% on the pcp. This reported EBITDA result takes into account a positive variance from the theoretical VIP program play result which had a positive EBITDA impact of $19.3 million. This compares to a negative EBITDA impact of $30.0 million in the pcp.
Normalised revenue of $1,202.0 million was up 3.2% on the pcp. During the year, main floor gaming revenue was $601.0 million, up 12.9% on the pcp.
Normalised VIP program play revenue was $363.7 million, down 11.0% on the pcp with turnover of $26.9 billion.
Non-gaming revenue grew 6.3% to $237.3 million. Crown Towers Melbourne hotel occupancy was 98.0% with an average room rate of $361. Crown Metropol Melbourne achieved hotel occupancy of 94.5% with an average room rate of $268. Crown Promenade Melbourne hotel occupancy was 95.3% with an average room rate of $225. These high occupancy rates reflect the very strong demand for luxury hotel accommodation in Melbourne.
The overall normalised operating margin decreased from 30.2% to 29.3%. The decline in margin is due to the change in the mix of VIP program play in favour of junket play versus direct premium play and the additional costs associated with that change in mix.
Normalised EBITDA from Crown Perth was $130.1 million, up 2.4% on the pcp. Reported EBITDA for the period was $137.7 million, up 1.5% on the pcp. This reported EBITDA result takes into account a favourable variance from the theoretical VIP program play result which had a positive EBITDA impact of $7.6 million.
This compares to a positive EBITDA impact of $8.6 million in the pcp.
Normalised revenue of $493.7 million was up 6.7% on the pcp. During the year, main floor gaming revenue was $260.1 million, up 3.2% on the pcp.
Normalised VIP program play revenue was $117.9 million, up 28.4% on the pcp with turnover of $8.8 billion.
Non-gaming revenue was down 2.6% to $115.7 million. Crown Metropol Perth hotel occupancy was 91.0% with an average room rate of $305. Hotel occupancy at Crown Promenade Perth was 93.8% with an average room rate of $214.
The overall normalised operating margin decreased from 27.5% to 26.3%. This reflects the change in business mix between main floor play and VIP program play, partially offset by productivity and efficiency improvements.
Normalised EBITDA from Crown Aspinalls was $10.3 million, down 50.2% on the pcp. Reported EBITDA for the period was $14.9 million, an increase of $18.4 million on the pcp. This reported EBITDA result takes into
account a positive variance from the theoretical VIP program play result which had a positive EBITDA impact of $4.6 million. This compares to a negative EBITDA impact of $24.2 million in the pcp.
EBITDA from Crown's wagering and on-line social gaming operations was a loss of $9.8 million.
Crown's wagering and on-line social gaming operations include CrownBet (a 62% owned, Northern Territory licensed on-line wagering business), Betfair Australasia (a 100% owned, Tasmanian licensed on-line betting exchange) and DGN Games (a 70% owned, on-line social gaming business based in Austin, Texas).
In July 2015, Crown acquired 60% of DGN Games LLC (DGN) for US$32.5 million (A$42.5 million). Subsequently in December 2015, Crown increased its shareholding in DGN to 70% by investing a further US$15m (A$20.8 million) in return for new units in the company. In December 2015, Crown through its majority owned subsidiary DGN, acquired 100% of Winners Club Limited (and subsidiaries) for US$10 million (A$13.8 million). Winners Club is a business which provides development and analytical services to on-line social gaming sites.
Crown's share of MCE's normalised NPAT for the half year to 31 December 2015 was an equity accounted profit of $37.2 million, down $73.2 million or 66.3% on the pcp. After adjusting for an unfavourable variance from theoretical and pre-opening costs, Crown's share of MCE's reported NPAT result for the year was an equity accounted profit of $9.4 million, down $75.9 million or 89.0% on the pcp.
While the medium to long-term outlook for Macau remains positive, Macau continues to experience a challenging period which has adversely affected all casino operators. Overall gross gaming revenue across the Macau market in the half year to 31 December 2015 declined 31.1%. However, MCE has further expanded its market share in Macau and increased MCE's exposure to the more resilient and profitable mass market segments.
Studio City3, MCE's second large-scale resort in Cotai, opened on 27 October 2015. Studio City's unique Hollywood-theme and entertainment centric offering provides an ideal complement to MCE's current portfolio of assets in Macau, particularly the premium-focused integrated resort, City of Dreams, enabling MCE to cater to a greater breadth of customers seeking a multi-dimensional leisure and tourism experience.
In the Philippines, City of Dreams Manila4 continues to grow a more diversified revenue stream, with the continuing ramp up of the rolling chip business complementing its mass market gaming and non-gaming segments. MCE remains confident in the long term success of the Philippines gaming market given the country's anticipated economic growth and supportive demographics, together with an expanding and Government-supported inbound tourism market.
MCE has announced the payment of a special dividend on or about 16 March 2016. Crown's share of the special dividend will be US$120.0 million. The special dividend highlights MCE's strong cash position and cash flow generating ability which has enabled MCE to return surplus capital to shareholders while still investing in MCE's business.
MCE has also announced that, as visibility regarding its operating and regulatory environment continues to improve, MCE remains committed to maximising cash distributions to its shareholders and that includes a review of its current dividend payout ratio of 30% of net income attributable to MCE.
During the period, Crown acquired a 20% ownership interest in the international restaurant and hotel company, Nobu, for US$100 million (A$136.4 million) and a 50% ownership interest in part of the property and operations at Ellerston in the Hunter Valley for $59.1 million. These investments are both accounted for as Investments in Associates.
3 Macau Studio City is 60% owned by Melco Crown Entertainment
4 The operator of City of Dreams Manila is owned by Melco Crown (Philippines) Resorts Corporation which is a 72.2% owned subsidiary of MCE
Crown's equity accounted result from other investments comprises its share of trading results from Nobu and Ellerston. Crown's share of NPAT was $0.4 million.
The Independent Liquor and Gaming Authority issued a restricted gaming licence to Crown for Crown Sydney at Barangaroo South on 8 July 2014. On 27 May 2015, Crown finalised agreements with the Barangaroo Delivery Authority and Lend Lease, which give Crown the opportunity to develop the Crown Sydney site at Barangaroo South. The process for approving amendments to the Barangaroo South masterplan and for planning approval for the development of Crown Sydney is ongoing.
The proposed Crown Sydney hotel will be Sydney's first six-star hotel and a landmark building that will complement Sydney icons like the Sydney Harbour Bridge and the Sydney Opera House.
On 12 December 2014, Crown announced that it had made an initial investment of $50 million to acquire a 50% share interest in land as part of a joint venture with the Schiavello Group. Designs are being finalised for an iconic world-class hotel and luxury apartment complex on the site in Queensbridge Street, Melbourne, adjacent to the Crown Melbourne Resort. The proposed hotel will be Crown Melbourne's fourth hotel and a very important addition to the resort, given Crown's existing hotels are running at almost full-capacity. The project is expected to provide Victoria with a major piece of tourism infrastructure as well as creating significant employment opportunities, both during construction and once operational.
The development remains subject to negotiation of joint venture agreements, financing arrangements and planning and other government approvals.
On 4 August 2014, Crown announced that a majority owned subsidiary had acquired a 34.6 acre vacant site on the Las Vegas strip. Crown and its partners are continuing design work on the project as well as developing a number of funding options. Necessary permits have been applied for and a construction contract is being negotiated.
Net operating cash flow for the period of $200.9 million compared to cash flow of $285.8 million in the pcp. After net capital expenditure of $237.3 million, acquisition of investments $241.1 million, dividend payments of
$138.4 million, and the effect of exchange rates, the Group's net debt position (excluding working capital cash of $156.7 million) at 31 December 2015 was $2,951.8 million, consisting of total debt of $3,192.6 million and cash (excluding working capital cash) of $240.8 million.
At 31 December 2015, total liquidity, excluding working capital cash of $156.7 million, was $881.9 million, represented by $240.8 million in available cash and $641.1 million in committed undrawn facilities.
As part of Crown's ongoing capital management strategy, Crown will continue to explore both capital markets and bank markets to finance anticipated growth projects.
During the period corporate costs were $58.7 million which was $15.2 million above the pcp. Notably, corporate costs included one-off transaction costs for investments made during the half.
The total net interest expense for the year was $71.0 million, an increase of $19.2 million on the pcp. This reflects higher net debt levels, partially offset by higher capitalised interest relating to Crown Towers Perth and Crown Sydney projects.
On 16 December 2015 Crown received a Price Query from the ASX which noted media speculation about a possible joint bid for Crown. Crown provided a response to the Price Query on 17 December 2015. Crown again confirms that it has not received any such proposal from any party. Crown is aware of its continuous
Crown Resorts Limited issued this content on 25 February 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 24 February 2016 23:06:34 UTC
Original Document: http://www.crownresorts.com.au/Investors-Media/ASX-Media-Releases/2016/25-02-2016-Crown-Announces-2016-Half-Year-Results
