More delay for Crown’s Sydney casino-hotel

Crown Resorts expects the opening of its $2 billion luxury six-star hotel and VIP-only casino at Barangaroo in Sydney could be further postponed because of planning delays.

The hotel and casino was originally expected to open around November 2019, but Crown said in August last year that planning delays could push the opening back by around 12 months.

“That’s probably now somewhere between 12 and 18 months,” Crown Resorts chief executive Rowen Craigie said on Thursday.

Crown Sydney now may not open until early 2021.

Mr Craigie said Crown is hoping to recapture some lost ground either in the remediation phase, the construction phase, or the pre-opening phase of the project.

The delay was regrettable, he said.

“The planning process is complicated. We can’t lodge our approval for Crown Sydney until (developer) Lend Lease lodges their approval to modify the master plan for Barangaroo South.”

Mr Craigie said the delays could add to the cost of the project because construction costs rise as time goes on.

News of the fresh delay came as Crown Resorts’ profit continues to be hit by weak conditions affecting its joint-venture casino-resort operations in Macau.

The group operates Crown casinos in Melbourne and Perth, and its joint-venture casinos in Macau and Manila are operated by Melco Crown Entertainment (MCE).

Crown on Thursday reported a 1.6 per cent lift in net profit for the six months to December 31 to $205 million.

But “normalised” net profit – Crown’s preferred measure of performance, and which excludes one-off items and variations in the theoretical win rate against high-rolling gamblers – fell 34.8 per cent to $210.3 million.

Crown’s share of reported profits from the Macau casino-resorts – City of Dreams, the recently opened Studio City, and Altira Macau – fell 89 per cent to $9.4 million.

Mr Craigie said gambling by VIP high-rollers in Macau had fallen away quite rapidly, and Macau was repositioning itself to be more of a gambling market for the masses.

He said MCE’s new Studio City casino-resort was more aimed towards the mass market, and Crown and MCE remained upbeat about Macau’s medium to long-term prospects because of the growing Chinese middle class.

Mr Craigie said a 9.8 per cent lift in revenue to $861 million from main-floor gaming in Crown’s Australian casino-resorts was solid.

A 3.8 per cent drop in turnover from VIP gambling to $35.7 billion was reasonable given strong growth in the prior corresponding period of 61.4 per cent, and the depressed nature of VIP gambling across Asia.

Shares in Crown were 58 cents, or 4.62 per cent, lower at $11.97.

MACAU WEAKNESS WEIGHS ON CROWN

* Net profit up 1.6pct to $205.04m

* Normalised profit down 34.8pct to $210.35m

* Revenue up 10.1 pct to $1.88b

* Interim dividend of 33 cents, up from 18 cents

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