CROWN RESORTS LIMITED
A.B.N. 39 125 709 953
Appendix 4D
Half year ended 31 December 2021
(previous corresponding period: half year ended 31 December 2020)
Results for announcement to the market
only | Results in accordance with Australian Accounting Standards | $m | ||||||||
Revenue from operations | up | 34.0% | to | 778.6 | ||||||
Net profit/(loss) for the period attributable to members of the parent | down | 62.4% | to | (196.3) | ||||||
use | ||||||||||
Theoretical Results (1)(6) | Actual Results (2) | |||||||||
$m | % Movement | $m | % Movement | |||||||
EBITDA before Closure Costs (4) & Significant items (6) | 28.8 | (79.6%) | 26.5 | (80.7%) | ||||||
Costs incurred during mandated closure (4) | (113.1) | (113.1) | ||||||||
Profit on disposal of Crown Sydney apartments (3) | 74.9 | 74.9 | ||||||||
Crown Sydney pre-opening costs (3) | (20.1) | (20.1) | ||||||||
Profit on disposal of other non-current assets (3) | 11.4 | 11.4 | ||||||||
Contribution towards class action settlement (3) | (20.0) | (20.0) | ||||||||
Restructuring costs (3) | (7.1) | (7.1) | ||||||||
EBITDA after Closure Costs (4) & Significant items (5)(6) | (45.2) | (47.5) | ||||||||
Depreciation & amortisation | (155.1) | (155.1) | ||||||||
Asset impairment (3) | (31.8) | (31.8) | ||||||||
EBIT (6) | ||||||||||
(232.1) | (76.8%) | (234.4) | (72.9%) | |||||||
Share of associates' profit/(loss) | 7.3 | |||||||||
Net interest expense | (35.8) | |||||||||
Income tax benefit | 66.6 | |||||||||
Net profit/(loss) after tax | (196.3) | (62.8%) | ||||||||
Non-controlling interest | 0.0 | |||||||||
Net profit/(loss) attributable to members of the Parent | ||||||||||
(196.3) | (62.4%) | |||||||||
(1) Theoretical results have been adjusted to exclude the impact of any variance from theoretical win rate on VIP program play. The | ||||||||||
personal | theoretical win rate is the expected hold percentage on VIP program play over time. The theoretical result gives rise to adjustments | |||||||||
For | to VIP program play revenue, operating expenses and income tax expense. Crown believes that theoretical results are the relevant | |||||||||
measure of viewing performance of the business as it removes the inherent volatility in VIP gaming revenue. Refer to note 3 in the | ||||||||||
attached for more information. |
(2) Actual results reflect revenues & expenses at actual win rates.
(3) These items have been classified as Significant items. Refer note 4(e) for further details.
(4) Closure Costs reflect costs incurred at Crown Melbourne, Crown Perth and Crown Sydney whilst the properties were closed due to Government direction. Refer note 3 for further details.
(5) Significant items in 'EBITDA after Closure Costs & Significant items' includes EBITDA related Significant items only.
(6) Non-IFRS measures. Non-IFRS measures have not been subject to audit or review.
1
CROWN RESORTS LIMITED
A.B.N. 39 125 709 953
Appendix 4D Continued
only | Dividends | Amount per | Franked amount |
security | per security | ||
Interim dividend | Nil | Nil | |
Previous corresponding period | Nil | Nil | |
Record date for determining entitlements to the dividend | Not applicable | ||
Interim dividend payment date | Not applicable | ||
Net Tangible Asset Backing | 31 December | 31 December | |
2021 | 2020 | ||
Net tangible asset backing per ordinary security on issue at period end(1): | $4.38 | $4.72 | |
(1) Net tangible assets includes all right-of-use assets. | |||
useFor additional Appendix 4D disclosures, refer to the accompanying Financial Report for the half-year ended 31 December | |||
2021, which includes the Directors' Report. Crown Resorts Limited's announcement made to the ASX on the same date | |||
as this Appendix 4D provides further analysis of the results. | |||
For personal |
2
CROWN RESORTS LIMITED
Directors' Report
For the half year ended 31 December 2021
The directors of Crown Resorts Limited ("Crown" or the "Company") submit their report for the half year ended 31 December 2021.
Directors | |
only | |
The directors of Crown in office during the half-year, and until the date of this Report are as below. Directors were in office | |
for this entire period unless otherwise stated. | |
Dr Ziggy Switkowski AO | Chairman (appointed 1 December 2021) |
The Hon. Helen A Coonan | Executive Chairman (until 27 August 2021) |
Steve McCann | Managing Director and Chief Executive Officer (appointed as Managing Director on 20 |
October 2021) | |
Bruce Carter | Non-Executive Director (appointed 25 August 2021) |
Jane Halton AO PSM | Non-Executive Director (appointed as Interim Chairman on 27 August 2021 until 1 |
December 2021) | |
Antonia Korsanos | Non-Executive Director (until 21 October 2021) |
Nigel Morrison | Non-Executive Director |
Anne Ward | Non-Executive Director (appointed 13 January 2022) |
useReview of Operations | |
For the half year ended 31 December 2021 Crown reported a net loss of $196.3 million, compared to a net loss of $120.6 | |
personal |
million in the prior comparable period ("pcp"). Total revenue of $778.6 million increased by 34.0% on the pcp. Crown's results for the first half reflect the severe impact on operations from the COVID-19 pandemic. In particular, Crown Melbourne and Crown Sydney were closed for most of the half due to Government imposed COVID-19 restrictions.
This review of operations includes certain non-IFRS measures, including theoretical results1, EBITDA, Significant Items and Closure Costs, which are used internally by management to assess the performance of the business. Non-IFRS measures have not been subject to audit or review.
CROWN MELBOURNE
Operating Conditions
Crown Melbourne continued to face significant disruption as a result of the COVID-19 pandemic, with gaming operations closed for 96 days during the half2. This compared to the pcp where gaming operations were closed for 134 days.
Operating restrictions were progressively lifted from mid-October for fully vaccinated patrons and staff. Whilst open, various operating restrictions applied, including patron capacity and density limits, restrictions on available gaming product and
hysical distancing protocols. Financial Performance
ForRevenue of $265.0 million compared to $97.1 million in the pcp, with main floor gaming revenue of $187.6 million (up $133.9 million) and non-gaming revenue of $77.4 million (up $37.7 million).
Given continued international border restrictions, there was no international VIP program play revenue in the period3.
Overall hotel occupancy across Crown Melbourne's three hotels was approximately 23%, with Crown Towers hotel occupancy 28%, Crown Metropol hotel occupancy 21% and Crown Promenade hotel occupancy 21%.
- Theoretical results have been adjusted to exclude the impact of any variance from theoretical win rate on VIP program play. The theoretical win rate is the expected hold percentage on VIP program play over time. The theoretical result gives rise to adjustments to VIP program play revenue, operating expenses and income tax expense. Refer to note 3 in the attached for more information. Crown believes that theoretical results are the relevant measure of viewing performance of the business as it removes the inherent volatility in VIP gaming revenue. Note that there was no international VIP program play at Crown Melbourne or Crown Perth during the period, with Crown Perth no longer offering VIP program play. From 1 July 2021, interstate VIP program play revenue is included in main floor revenue, and no longer adjusted for any variance from theoretical win rate.
- During the first half, Crown Melbourne's gaming operations were closed for the periods 16 July to 27 July 2021 and 6 August to 28 October 2021.
- From 1 July 2021, interstate VIP program play revenue is included in main floor revenue, and no longer adjusted for any variance from theoretical win rate.
3
CROWN RESORTS LIMITED
Directors' Report
For the half year ended 31 December 2021
EBITDA before Closure Costs and Significant Items was $7.1 million, compared to $5.8 million in the pcp4.
Closure Costs of $94.5 million were recorded during the period, whilst a net gain from Significant Items of $7.8 million related
to the profit on disposal of other non-current assets (comprising an aircraft and a parcel of land), partly offset by restructuring onlycosts.
Reported EBITDA was a loss of $79.6 million, compared to a loss of $87.8 million in the pcp.
CROWN PERTH
Operating Conditions
Shortly before the end of the 2021 financial year, Crown Perth was required to close its gaming operations in response to Western Australian Government restrictions due to COVID-195. On 6 July 2021, Crown Perth recommenced trading of gaming and non-gaming operations at a reduced capacity, whilst from 12 July 2021, Crown Perth recommenced trading of all gaming
useand non-gaming operations, with restrictions transitioning to pre-COVID conditions. Financial Performance
Revenue of $402.9 million was down 1.5% on the pcp, with main floor gaming revenue of $236.5 million, down 14.1%, and non-gaming revenue of $166.4 million, up 24.7%.
There was no VIP program play revenue in the period as Crown no longer offers VIP program play at Crown Perth.
Overall hotel occupancy across Crown Perth's three hotels was approximately 73%, with Crown Towers hotel occupancy 77%, personalCrown Metropol hotel occupancy 75% and Crown Promenade hotel occupancy 61%.
EBITDA before Closure Costs and Significant Items was $109.6 million, down 32.6% on the pcp. Excluding the impact of JobKeeper payroll subsidies in the pcp6, EBITDA before Closure Costs and Significant Items was down 20.6%.
Closure Costs of $3.8 million were recorded during the period.
Reported EBITDA was $105.8 million, down 34.8% on the pcp.
The operating margin (before Closure Costs and Significant Items) decreased from 33.7% to 27.2% (excluding the impact of JobKeeper payroll subsidies received in the prior period). The decrease in margin reflected the normalisation of operating conditions, as well as increased costs and business mix.
CROWN SYDNEY
Operating Update
Non-gaming operations progressively commenced trading at Crown Sydney from late December 2020. During the period, Crown Sydney faced significant disruption as a result of COVID-19, and was closed for 102 days7. Non-gaming operations reopened to fully vaccinated guests and staff on 11 October 2021, with operations showing improving trends.
ForGaming areas are yet to commence operation as Crown continues to work through the consultation process with the casino's regulator, the Independent Liquor and Gaming Authority (ILGA). Crown are in frequent discussions with ILGA and the independent monitor, and while no official opening date has been confirmed by the regulator, Crown is targeting to be in a position to announce the opening of the gaming floor shortly. Opening is expected to occur on a staged basis given current staffing levels, with further recruitment for gaming-related roles required ahead of a full commencement of gaming operations.
Sales of the Crown Sydney apartments continue to progress, with almost $1.2 billion in gross sales and pre-sale commitments (inclusive of GST) to date. Based on current progress, Crown is focused on selling all remaining apartments by 30 June 2022. As at 31 December 2021, approximately $975 million in sale proceeds (net of GST) had been received (including deposits previously released), with receipt of the final approximately $275 million in expected settlement proceeds (net of GST) subject to timing of the sales.
- The pcp included $15.7 million in payroll subsidies under the Commonwealth Government's JobKeeper scheme.
- During the first half, Crown Perth's gaming operations were closed for the period 1 July to 5 July 2021.
- The pcp included $24.7 million in payroll subsidies under the Commonwealth Government's JobKeeper scheme.
- During the first half, Crown Sydney was closed for the period 1 July to 10 October 2021.
4
CROWN RESORTS LIMITED
Directors' Report
For the half year ended 31 December 2021
Only limited spend remains on the total project cost of approximately $2.2 billion. The expected net project cost following completion of all apartment sales, net of tax attributable to the gain on sale of apartments, remains approximately $1.1 billion.
onlyFinancial Performance
Non-gaming revenue was $36.1 million, compared to $0.9 million in the pcp.
Hotel occupancy was 17% during the period. Upon re-opening in October 2021, hotel occupancy showed improving trends, averaging nearly 40%, with higher occupancy on weekends and strong average room rates.
EBITDA before Closure Costs and Significant Items was a loss of $4.3 million compared with a loss of $0.7 million in the pcp.
Closure Costs of $14.8 million were recorded during the period, whilst there was a net gain from Significant Items of $54.8 million related to the profit on disposal of Crown Sydney apartments, partly offset by pre-opening costs8.
useReported EBITDA was $35.7 million, compared to a loss of $26.0 million in the pcp.
CROWN ASPINALLS
Operating Conditions
Crown Aspinalls continued to face challenging operating conditions during the period as a result of the COVID-19 pandemic. The property was required to close for certain periods of time due to operational constraints, and when open, performance was impacted by subdued international travel, staff shortages and reduced operating hours.
personalFinancial Performance
Theoretical EBITDA before Closure Costs and Significant Items was a loss of $3.2 million, compared to a loss of $5.3 million in the pcp.
There were no Closure Costs or Significant Items during the period, as the periods of closure were not due to Government direction.
Reported EBITDA was a loss of $5.5 million, compared to a loss of $23.0 million in the pcp. The reported EBITDA result takes into account the variance from the theoretical VIP program play result which had a negative EBITDA impact of $2.3 million. This compares to a positive EBITDA impact of $0.6 million in the pcp.
CROWN DIGITAL
Revenue from Crown's wagering and online social gaming operations was $69.5 million, down 12.7% on the pcp, whilst EBITDA of $14.3 million was down 38.4% on the pcp.
Revenues across both Betfair and DGN were lower as both businesses cycled strong performance in the pcp. Expenses did not decline to the same extent as both businesses continue to invest to drive longer term growth, resulting in an overall decline in margin.
ForCORPORATE COSTS
During the period, corporate costs before Significant Items were $94.7 million, $50.5 million higher than the pcp.
The increase in corporate costs primarily related to higher legal and consulting fees associated with various regulatory inquiries. With the conclusion of the Victorian Royal Commission and evidentiary hearings of the Perth Casino Royal Commission during the period, corporate costs are expected to be lower in the second half. Crown now expects full year corporate costs to be around $150 million9.
On 29 October 2021, Crown announced it had reached an agreement to settle the shareholder class action commenced against it on 4 December 2017 in the Federal Court of Australia, referenced as Zantran Pty Limited v Crown Resorts Limited. The expected total settlement amount is $125 million, inclusive of interest and costs. Crown contributed $20 million towards the settlement amount during the period, which has been recorded as a significant item. Crown is considering its legal rights
- Gaming relating costs (including an appropriate allocation of Support Departments) that continue to be incurred prior to the commencement of gaming operations.
- Excluding costs associated with the Blackstone proposal.
5
This is an excerpt of the original content. To continue reading it, access the original document here.
Attachments
- Original Link
- Original Document
- Permalink
Disclaimer
Crown Resorts Limited published this content on 16 February 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 16 February 2022 22:33:13 UTC.