Covid ravages Crown Group as it announces $261 million net loss

After a turbulent 12 months, Crown Resorts has announced a $261 million full-year statutory net loss after the troubled casino group has been forced to close or restrict operations at its properties because of the COVID-19 pandemic and regulatory scrutiny.

Crown’s interim Chairman, Jane Halton, said: “2021 has been a challenging year for Crown, with intense regulatory scrutiny and unprecedented impacts on business operations from the COVID-19 pandemic.

Restrictions of operations continue for the business after the disclosure of company failings including how Crown was infiltrate by organised crime and facilitated money laundering, broke Victorian gaming laws and underpaid state taxes.

The group woes include awaiting the outcome of Victoria’s royal commission into its Melbourne casino licence and one into its Perth licence. The licence for the new Sydney casino has been suspended after an independent inquiry in New South Wales ruled it the group was unfit to operate as a casino.

In the live webcast addressing the results this morning newly appointed Chief Executive Officer of Crown Melbourne Limited and Chief Executive Officer Crown Resorts (regulatory approvals pending), Steve McCann said the business will do everything in its power to turn around the tainted public sentiment after failings were exposed by the royal commission. He said they will work towards rebuilding trust and making amends.

The pandemic has also played a harsh role when the latest figures are compared to the pre-pandemic results for the group of $402 million profit in 2019 when revenue was $2.9 billion. Revenue for the past twelve months slumped to $1.5 billion to June 30 down 31.3%.

As a result, Crown will not declare or pay dividends in respect of the half year ending 31 December 2021.

Along with the appointment of Steve McCann, last week also saw Crown announce its new Chair Ziggy Switkowski AO to replace Helen Coonan in a bid to pump fresh blood into the business.

Jane Halton said, “I would like to thank Helen Coonan for stepping up and providing leadership and stability during this period. Helen has played an important role at Crown over a long period of time, particularly since her appointment as Executive Chairman where she has made a major contribution to Crown’s reform program.”

Despite the difficulties Chief Financial Officer, Alan McGregor said the performance of Crown Sydney’s food and beverages operations pre-lockdown was encouraging plus the excellent revenue gained from Crown Residences.

‘We are continuing to see good momentum in Crown Sydney apartment sales, with over $1 billion in gross sales and pre-sales commitments achieved to date, representing approximately 80% of the apartments by number. Settlement of the apartment sales commenced in April 2021, with approximately $650 million in proceeds received during the period allowing Crown to reduce outstanding debt and fully repay the $450 million project finance facility prior to year-end,” said McGregor.

Mr McGregor said Crown Sydney and Melbourne continue to suffer under the restrictions reporting ongoing losses of roughly $1.2 million and $7 million per week respectively.