Crown Resorts Suffers Losses Of Over $261M Due To Investigations and COVID
Australia’s biggest casino operator, Crown Resorts has reported an annual loss of $261.6 million. The last fiscal saw Crown bring in $79.5 million profits but the losses this year do not come as a surprise as the casino operator has faced multiple investigations, battled numerous allegations and has had to deal with the COVID-19 shutdown throughout the country.
Shareholders will not receive any dividend for the year as revenues fell by 31% to $1.54 billion in the 12 months ending June 30.
Crown Resorts has been subjected to investigations in New South Wales, Victoria and Western Australia. Crown is expecting a decision from the royal commission who will determine whether the operator is fit to continue to operate its flagship Melbourne casino. A decision is anticipated by October 15, with options ranging from a state-supervised management reform to the termination of the company’s license.
Crown’s misfortunes seem to be never ending, as it staring at another royal commission in Western Australia and also the aftermath from the Bergin probe in New South Wales, which ruled it “unsuitable” to operate a newly built casino in Sydney due to its poor credentials in Melbourne.
Owing to the regulatory issues, the group has witnessed the removal of its entire board as well as the departure of its CEO and chair. The investigation has also had an impact on the company’s performance, with corporate costs rising to $111.6 million as a result of greater legal and compliance costs related with the different investigations, as well as higher insurance rates.
COVID-19 Lockdown Hinders Crown
The Covid-19 pandemic has also wreaked havoc on Crown’s financials due to the simultaneous closure of its highly profitable Melbourne property and the suspension of gaming operations at the Perth and its UK operations. These closures have caused Crown a financial setback of $120.6 million in the past year.
Crown Melbourne’s earnings dropped by close to 80% but Crown Perth recorded a 57% increase. The newly opened casino in Sydney lost $23 million, owing partly to high pre-opening costs. New CEO Steve McCann has informed shareholders that Crown Resorts has some uncertain times ahead.
Crown announced earlier this week that it has secured funding from banks in exchange for a moratorium on dividend payments until at least December 2021, and possibly longer if its casino licenses in Victoria and Western Australia are withdrawn by royal commissions in either of those states.