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Crown to focus on domestic assets, VIP coming around

Casino operator Crown Resorts says it will continue to invest significantly in its Australian properties to remain competitive with new integrated resorts emerging across Asia and Australia.

Crown’s executive chairman John Alexander told shareholders during an AGM on Thursday that the company will focus on improving the underlying performance of its key Australian resorts, and execute on its existing development project pipeline, as well as to grow its digital business.

According to Mr. Alexander, the company saw mass floor gaming revenue across its resorts rise slightly in the period from July 1 to October 22, while non-gaming revenue grew about 6 percent.

VIP program play across its resorts went down around 17 percent in this period.

However, Crown noted that its Melbourne VIP program play turnover exceeded expectations “which is encouraging given that most of the prior corresponding period preceded the detention of Crown’s staff in China.”

In regards to the Australian project pipeline, Crown says it forecasts to spend a further $1.9 billion in capex from FY18 to FY20, with $1.6 billion to be spent on the construction of its Crown Sydney Hotel Resort, slated to open in the first half of 2021.

The company also said it saw growth prospects in its digital business, which saw strong revenue growth and improved profitability during FY17.

Also mentioned was its most recent investment in skill-based gaming development company, Chill Gaming, a 50/50 joint venture with the founders of Wymac Gaming Solutions.

Speaking about recent allegations that the company had tampered with its slot machines, Mr. Alexander said he was “angered and disappointed by the outrageous and unfounded allegations levelled at us by Mr. Wilkie.”

The chairman went on to reiterate that the company “emphatically rejects these allegations.”

Earlier this year, Crown reported normalized EBITDA of $828 million, and a normalized NPAT of $343.1 million, which was down 15.5 percent year-on-year.

The company said the results reflected difficult trading conditions at Crown’s Australian resorts, due primarily to the reduction in VIP program play revenue and challenging economic conditions in Perth.

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