Melbourne headquartered entertainment group Crown Resorts has seen its 2020 financial performance plummet, as media outlets report that the group is banking on its domestic showing to bolster profit in the face of international travel bans to curb the spread of COVID-19.
The group owns and operates the Crown Melbourne and Crown Perth integrated resorts, is currently constructing the $2.2bn Crown Sydney Hotel Resort and owns and operates Crown Aspinalls in London, as well as holding various other business interests.
Publishing its full-year results for the period ending June 30, 2020, net profit for the firm nosedived 80.2 per cent from AU$401.8m to AU$79.5m with revenue down 25.7 per cent to AUS2.21bn.
Main floor gaming revenue of $1.23bn represents a decline of 26.9 per cent, VIP revenue dropped 26 per cent to $398.2m and non-gaming revenue finished up at $581.5m, down 22.7 per cent.
As a result of government mandated orders Crown’s Apinalls property closed on March 20, 2020, with venues in Melbourne and Perth shutting down three days later, and as of the end of the reporting period the former two remained closed.
With effect from 27 June, 2020, Crown Perth re-commenced gaming activities and the operation of the majority of its food and beverage venues under temporary restrictions agreed with the Western Australian government.
For the reporting period, revenue at the group’s Melbourne property dropped 26 per cent to AU$1.6bn (2019: AU$2.16bn), Perth’s performance declined AU$609.7m (2019: AU$811.6m) and Aspinalls fell 24 per cent to AU$42.7m (2019: AU$56.3m). Crown Digital revenue increased 4.1 per cent from AU$130.1m to AU$135.5m.
Ken Barton, Crown’s CEO and managing director, explained: “2020 has been an extremely challenging year. From late January 2020, Crown began to experience softer trading conditions as a result of travel restrictions and general community uncertainty in response to COVID-19, particularly impacting visitation to Crown Melbourne.
“In March 2020, Crown was directed to close its gaming activities and a significant part of its non-gaming operations at Crown Melbourne and Crown Perth for an extended period, with our financial results reflecting the impact of these closures.
“These closures have also had a substantial impact on our people, with approximately 95 per cent of our employees stood down following closure. I would like to thank our employees for their continued patience and support during this challenging time.
“As a result of the impact on Crown’s businesses, Crown qualified for the Commonwealth Government’s JobKeeper program, which has helped support thousands of our employees.
“In addition, Crown has established a Hardship Fund to provide additional, targeted financial assistance to employees experiencing serious financial hardship as a result of COVID-19. This program is in addition to the many other programs Crown has established to support employees during this unprecedented time.”
Through the JobKeeper program, Crown recorded $43.4m in payroll subsidies relating to the period through to June 30, 2020 for employees that continued to work in either a full or partial capacity.
In addition, Crown recorded $67.9m in JobKeeper payments on behalf of employees that were stood down which were paid in their entirety to employees.
Furthermore, Barton also provided an update to ongoing developments in Sydney, with the property, set to open in December 2020, to be the first casino in Australia to open in more than a decade as well as becoming the city’s first-ever six-star hotel.
“Despite the challenges of COVID-19, the construction of Crown Sydney has continued throughout this period and it’s a credit to our team that it remains on track for its scheduled December opening,” Barton added.
“Crown Sydney is already providing significant employment for Australian businesses with almost 1,300 workers currently employed and expected to remain on site to complete the fit-out. Once fully operational, Crown Sydney is expected to employ over 2,000 people, providing a significant boost for the New South Wales hospitality industry.”