Crown Resorts trims annual loss to $165m amid ‘challenging conditions’

Crown Resorts has posted a reduced annual loss as better margins and cost cutting offset lower revenue from its flagship Melbourne casino complex.

The group’s newly filed accounts for the 2024 financial year also confirm that its private equity owner Blackstone injected more cash into Crown over the past 12 months to drive its turnaround.

Crown, which also has casinos in Perth and Sydney, lost $164.8m in the year to June 30, down 17 per cent from the year earlier’s $199.4m loss on flat revenue of $2.78 billion.

Revealing only revenue numbers for its businesses, Crown said Melbourne’s turnover dropped 4.4 per cent to $1.43b while Perth grew 4.9 per cent to $849.6m. Sydney, where gaming operations began in only August 2022, was 9 per cent better at $296.1m.

Crown, bought by Blackstone for $8.9 billion in mid-2022, is struggling to regain its pre-COVID trading levels in the wake of three damning State inquiries, softer international tourism, subdued discretionary spending and the loss of high rollers after regulatory changes that require patrons to use dedicated cards to gamble.

The group said the 2024 result “reflects the continued challenging operating conditions and macroeconomic environment impacting the hospitality and tourism industry”.

“Crown remains committed to its continued transformation and long-term strategy of sustainable growth for its business,” it said.

The trading challenges came as Crown seeks to progress plans for promised reburbishments in Melbourne and Perth.

Former Crown chief executive Ciaran Carruthers revealed two weeks ago that the group was clawing back ground after the introduction of mandatory carded play for poker machines in December lost Crown Melbourne about 13 per cent of its “foot traffic and slightly more in business volume”.

Mr Carruthers, who is set to depart Crown by the end of the year after stepping down as chief executive in August, told an Asian gaming website that the group’s margins “had greater than doubled ... across the business”, despite cost-of-living pressures weighing on discretionary spending.

Crown is emerging from a horror couple of years after probes in NSW, Victoria and WA found it unfit to hold casino licences because of conduct that was deemed “variously illegal, dishonest, unethical and exploitative”.

The group was forced to accept the supervision of outside monitors to survive and has paid $700m in fines. However, it has since recovered its “suitability” standing in both NSW and Victoria, and a decision on the Perth licence is expected in early 2025.

Mr Carruthers said the costs associated with the gaming reforms and the upgraded systems to ensure compliance with anti-money laundering and terrorism financing laws “obviously impacts margins”.

“But we’re seeing improvement with the restructure of our cost base that’s been rolled out over the last six to nine months ... and there’s still room for (more).”

Earlier this year, Crown cut 1000 of its 20,000 jobs to generate savings, while also selling its 20 per cent in restaurant chain Nobu for $US180m ($267m).

The accounts confirm that Crown received hundreds of millions of dollars in further interest-free loans from Blackstone during the year to fund working capital. As at the end of the year it owed its owner $1.41b, up from $1.30b.