- The hospitality industry has been hit hard by the unprecedented nature of lockdowns imposed in response to COVID-19.
- Crown Resorts incurred huge losses during FY21 as its operations faced COVID-19 related closures and operating restrictions throughout the period.
- The renowned entertainment group of Australia posted a 31.3% decline in statutory revenue.
COVID-19 and consequent lockdowns have severely impacted various industries and caused huge losses to many businesses across the globe. Even for ASX 200-listed companies, such as Crown Resorts Limited (ASX:CWN), FY21 has been a challenging period.
One of the largest entertainment groups of Australia, Crown Resorts has faced significant disruptions due to the mandated closures amid the pandemic.
Bleak numbers in FY21 as the pandemic bites
The results for the 12-month period ended 30 June 2021 clearly reflect that Crown’s business performance has been hit hard due to the unprecedented nature of lockdowns imposed in response to COVID-19.
Image source: © Jccain | Megapixl.com
Below are the key points from its annual report:
- Statutory revenue stood at AU$1,536.8 million, a decrease of 31.3% on the prior corresponding period.
- Main floor gaming revenue was AU$406.9 million, dropped 54.3% as compared to FY20.
- Theoretical VIP program play revenue reached AU$4.4 million, 98.0% down on previous year.
- Non-gaming revenue was AU$171.2 million, a decrease of 52.8% on the pcp.
- Reported net profit after tax attributable to the parent a loss of AU$261.6 million.
- Reported EBITDA was a loss of AU$100.6 million, compared to a profit of AU$381.8 million in FY20.
- Closure costs of AU$120.6 million during the financial year 2021, owing to costs incurred at Crown Melbourne, Crown Perth, and Crown Aspinalls.
- Crown’s net debt position was ~AU$890 million (excluding working capital cash) at 30 June 2021
- Total liquidity was over AU$560.8 million.
Major changes across operating segments
Due to COVID-19 related restrictions, operations at various Crown establishments were either closed or were allowed to open under restricted capacity.
Following government restrictions, the company managed to launch select non-gaming operations at Crown Sydney for public for the first time from 28 December 2020.
To cater to the challenging times amid the pandemic, the company introduced a major change in its leadership team. It welcomed Dr Ziggy Switkowski as the Chairman to lead the Board.
Image source: © Roberto1977 | Megapixl.com
Crown and its relationship banks also agreed to amend the former’s financing arrangements, resulting in an extension of near-term maturities, waiver of financial covenants concerning the 31 December 2021 testing date, changes to the consequences of various casino licence events and a commitment for additional AU$250 million debt facility.
Also, the company has permanently ceased dealing with all junket operators.
The financial year 2022 continues to be another challenging year due to disruptions from COVID-19. While the period of uncertainty remains in place to influence the business performance, Crown plans to recover the loss incurred by gradual opening in a restricted capacity.
Stock information: CWN stock was trading at AU$9.260 at 02:23 PM (AEST) on 30 August 2021, with market capitalisation of AU$6.31 billion.