Casino profit on rise

Relief after economic double whammy

THE Reef Casino Trust in Cairns is performing better in the new financial year after a shocking first six months of 2019.

An extraordinary wet season and global economic jitters helped to wipe more than twothirds from the trust’s first-half profit, although the result was slightly better than forecast.

Trust chairman Richard Haire said the second half year was traditionally tourist season”.

“The trust has experienced a better start to the second half compared to the start of the first half,” he said. “However, economic and trading conditions in Cairns and the region remain challenging.

“The Reef Hotel Casino’s management strategy is to tightly manage performance under challenging conditions the “high based on three key strategic areas – electronic gaming, table games and hotel operations.”

The trust said its net profit fell by 69 per cent to $755,000 in the six months to June 30, down from $2.42 million a year ago, while revenue dipped by 27 per cent to $7.6 million amid exceptionally weak visitor numbers to the Far North.

The result was, however, slightly better than last month’s revised guidance, which had been raised on improved rental income from the Reef Hotel Casino in June.

Casino chief executive Alan Tan said the result had been weighed down by a softness in Cairns tourism not seen for a number of years. He said a decline in both international and domestic visitors had been exacerbated by weak consumer spending, general anxiety around the federal election result and an increase in rival accommodation options.

A poor Chinese New Year season also drove a 5.9 per cent decline in Chinese visitation to Queensland in the year to March, which had reduced the number of premium players.

“One factor has been the escalating trade war between the US and China,” Mr Tan said.

Overall casino revenues were 24.6 per cent lower than last year.

Nonetheless, the trust’s distributable profit was also slightly higher than had been forecast at $1.55 million despite falling 69 per cent from $48.4 million.

The trust will pay an interim distribution of 3.04 unfranked cents per unit, down from last year’s 9.71 cent interim distribution.

Shares in the trust were last trading at $2.41 on the ASX.