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Net profit down 80.2% as Crown Resorts feels FY20 pain of COVID-19 closures

Australia’s Crown Resorts has reported an 80.2% decline in net profit after tax and 40.6% fall in EBITDA for the year ended 30 June 2020, heavily impacted by the effects of COVID-19 which has seen flagship property Crown Melbourne closed since 23 March.

Releasing its FY20 financials on Wednesday, Crown revealed profit of just AU$79.5 million (US$57.1 million) and EBITDA of AU$504.6 million (US$362.6 million) on a 25.7% decline in revenue at its Australian resorts – Crown Melbourne and Crown Perth – to AU$2.21 billion (US$1.59 billion) with the results aided by some good fortune in the VIP segment, where turnover fell 46.5% to AU$20.4 billion (US$14.66 billion) but revenue by 26.0% to AU$398.2 million (US$286.0 million).

Main gaming floor revenue at Australian resorts fell 26.9% to AU$1.24 billion (US$891 million) while non-gaming revenue was down 22.7% to AU$581.5 million (US$417.7 million).

With Crown Melbourne still closed following a second outbreak of COVID-19 across the city, which has emerged as Australia’s COVID-19 hotspot in recent months, the company reported closure costs of AU$81.6 million (US$58.6 million). Costs could have been higher but for AU$43.4 million (US$31.2 million) in payroll subsidies and AU$67.9 million (US$48.8 million) in payments from the federal government’s JobKeeper scheme, with 95% of Crown’s 11,500 employees having been stood down in some capacity since March.

“We will continue to work with the Government and health authorities on how we can safely re-open when it is appropriate to do so,” said Crown CEO Ken Barton.

“Given this backdrop, Crown has been focused on liquidity management to ensure it is well placed to withstand this extended period of closure. I would once again like to acknowledge the support we have received from our relationship lenders, with new bilateral facilities implemented during the year and the execution of the Crown Sydney financing facility following year end.”

Barton said the company’s AU$2.2 billion (US$1.6 billion) Crown Sydney development remains on track to begin its phased opening from December.

The company did not offer a final dividend for FY20.

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