Crown satisfied with VIP growth
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MELBOURNE, Feb 22 AAP
February 22 2013, 2:14PM
There's plenty enough Chinese VIP gamblers to go around for everyone, says casinos operator Crown.
Crown on Friday booked a net profit of $180.8 million for the six months ended December 31, down 34.1 per cent on the profit of $274.4 million in the prior corresponding period.
The result included a $52 million after-tax loss in the value of Crown's 10 per cent stake in rival casinos operator Echo Entertainment Group, arising from movements in Echo's share price.
Crown's "normalised" profit, which excludes significant items and takes into account variations in the theoretical win rate against VIP gamblers lifted 15.1 per cent to $243.5 million.
Crown operates casinos in Perth and Melbourne and has a 33.7 per cent stake in Melco Crown Entertainment in Macau.
Crown said a $64.5 million profit contribution from the Melco joint venture, after adjusting for an above theoretical win rate, was a major contributor to its normalised net profit.
Turnover from Crown's VIP players at the Melbourne and Perth casinos rose 12.3 per cent to $417.0 million.
VIP program play at Melbourne lifted 15.2 per cent to $327.9 million, and rose 2.8 per cent to $89.1 million in Perth.
Crown chief executive Rowen Craigie was asked by reporters whether the Chinese VIP gambling market was big enough to support casino upgrades undertaken or proposed by Crown, Echo and SkyCity at Melbourne, Perth, Adelaide, Sydney and Brisbane.
"I think the simple answer to that is that Australia has less than two per cent market share," he said.
"So there is plenty of opportunity...for the VIP business to grow across all of the Australian casinos.
"This is not a fixed market where Australian properties are going to cannabalise each other."
He said Australia needed a "critical mass" of luxury properties to compete against Macau, Singapore and Las Vegas, which also had a critical mass of properties.
Mr Craigie was satisfied with the number of VIP gamblers visiting the Crown Melbourne casino, following completion of refurbished VIP facilities there.
"I think our VIP growth in Melbourne was reasonable," he said.
In the first three months of the first half, the VIP market at casinos in Macau and Singapore had dropped off, then picked up in the latter months.
"The Melbourne result is a bit reflective of what was happening in Macau and Singapore," Mr Craigie said.
The volatility in the VIP market reflected uncertainty surrounding the change in Chinese political leadership late last year.
Mr Craigie would not give a forecast on VIP visitations in the second half of the financial year.
"But we're halfway through our traditional Chinese New Year visitation period, so I think when we're through that we'll have a better sense of how the second half is looking," he said.
Mr Craigie said the overall first-half results for Crown's Australian casinos were "reasonable" given disruption caused by refurbishments at both properties, particularly the expansion of the main gaming floor in Perth.
The casinos were also affected by weak consumer sentiment, especially in Melbourne.
Shares in Crown were 22 cents higher at $11.77 at 1351 AEDT on Friday.
By Trevor Chappell