Crown Resorts stung by drop in Chinese spending

SYDNEY: Australia’s biggest casino company Crown Resorts Ltd reported a sharp decline in spending by wealthy Chinese tourists at its properties, pushing its shares down in their biggest one-day fall in more than two years.

Crown, which is owned 47% by billionaire James Packer, also posted a weaker than expected profit for the six months to December.

Turnover from “VIPs” – largely Chinese tourists on package holidays – fell 12% compared to a 16% rise in the year-ago period.

“People at the premium end have been coming to the property in the same numbers but spending less,” said chief financial officer Ken Barton on an earnings call.

“We’re seeing casual restaurants doing better than premium restaurants,” he added.

The decline shows the far-reaching effects of a cooling in Chinese spending that has already driven exporters like Australian vitamin maker Blackmores Ltd to lower profit guidance and iPhone maker Apple Inc to issue a revenue warning.

That has been against the backdrop of a China-US trade war and a Sino-Australian diplomatic dispute over accusations of undue political interference.

Gambling revenue in the Chinese island of Macau, the world’s biggest casino destination, fell in January for the first time in more than two years partly due to slowing economic growth and the effects of trade tensions.

The company said normalised net profit, which removes variance in win rates, grew less than 1% in the half-year to A$194.1mil (US$139mil). Pre-tax profit came in at A$432.5mil compared with analyst forecasts of A$450mil. — Reuters