Australian casino giant Crown Resorts Ltd said on Wednesday it was betting on domestic gambling to bolster profit as an international travel ban triggered by the coronavirus pandemic wiped out much of its annual earnings.
Crown, one-third owned by billionaire James Packer, previously pegged its future to well-heeled Chinese tourists visiting its casinos in Melbourne and Perth, with a new A$2.2 billion ($1.6 billion) resort in Sydney to open later this year.
But with borders closed to try to stop the spread of COVID-19, net profit plunged to A$79.5 million for the year to end-June, from a restated A$401.8 million a year earlier. The company scrapped its final dividend payout, against 30 cents per share last year.
The results reflect the need for a dramatic change of strategy for the company. Crown’s main casino, in Melbourne, has been at least partly closed since March due to a virus outbreak there and the company has laid off most of its workforce.
“Realistically it’s not going to be much of a Chinese New Year for international travel,” said CEO Ken Barton on a call with analysts, referring to the annual Chinese holiday season, taking place in mid-February next year.
“It may well be that, before we see international travel, people are able to travel to New South Wales (NSW) (from elsewhere in Australia),” he added. NSW is home to Sydney, which is under less severe restrictions of movement than Melbourne.
The company also disclosed the amount of government assistance it is receiving: it said it has collected A$111.3 million through an emergency scheme to help lockdown-affected companies pay staff wages.
Crown didn’t give a profit forecast but said “main floor” gambling revenue – as opposed to “VIP” revenue from upscale tourists – at its Perth casino was up 18% in the first six weeks of the new financial year.
Crown shares were up 2.9% in afternoon trading, while the broader market was up 1%, but are still down about one-sixth since February when fears of the virus sparked share market convulsions globally.