Australian gambling operator Crown Resorts, owned by billionaire businessman James Packer, is to announce its annual financial results later this week.
Analysts from Deutsche Bank forecast that the company’s Crown Perth casino venue is to post a 6% increase in normalized earnings to A$256 million. However, they pointed out that the gambling facility failed to keep up with Crown Melbourne, yet another property operated by the company.
In comparison, the Melbourne venue is expected to report a 16% growth in normalized earnings to A$654 million.
The Deutsche Bank also reminded in a research note that Crown Perth’s financial performance comes at a time when the Western Australia government cut the tax the casino pays on the profits generated from foreign high rollers. Previously Crown Perth contributed 11% of its profits to the state. Now, it pays aн 8% tax.
The Deutsche Bank analysts also commented in their note that Crown Melbourne is currently benefiting from strengthened domestic revenue from gaming operations as well as the increasing number of visitors from Mainland China. In comparison, Crown Perth is primarily benefiting from lower operating costs, according to the experts.
They also noted that they expect a mixed outlook commentary. It seems that overall, Crown’s Australian casinos are improving, despite Crown Perth failing to keep up with the rest of the properties run by the operator.
According to the Deutsche Bank’s note Crown’s investment in Macau is expected to have a negative effect on the operator’s financial results. Last week, Melco Crown Entertainment, the joint venture between Mr. Packer’s company and Hong Kong businessman Lawrence Ho’s Melco International Development, reported a 24% decrease in net revenue to US$916.8 million.
Crown’s 34% stake in the joint entity contributed to the Australian gaming company normalized net profit of A$166 million, down 43% year-on-year. The Deutsche Bank analysts pointed out in their note that the operator is likely to give a cautionary outlook on the Chinese administrative region, which is known to be the world’s most profitable gambling hub, despite the difficulties it has been facing for some time now.
Generally, speaking Crown is expected to post a 15% decrease in its normalized net profit to A$542 million.
Aside from its financial performance, the operator is also expected to reveal details about its A$645-million Crown Towers Perth six-star hotel, which is expected to be completed towards the end of 2016.
