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UPDATE 1-Crown chairman steps down, annual profit falls on Macau downturn

Published 13/08/2015, 11:45 am
© Reuters.  UPDATE 1-Crown chairman steps down, annual profit falls on Macau downturn
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* Packer to remain deeply involved with Crown

* Former banker Robert Rankin named chairman

* Macau profit falls 44.6 pct (Updates with more detail, comment)

By Jane Wardell

SYDNEY, Aug 13 (Reuters) - Billionaire James Packer stepped down as chairman of Australia's Crown Resorts Ltd CWN.AX on Thursday, spooking investors after the casino operator he owns half of said a slump in its Macau earnings pushed annual net profit down a steeper-than-expected 41 percent.

Shares in Crown fell as much as 5.4 percent, their biggest one-day drop in just over five months, with analysts saying Packer appeared to be taking a back seat in running the company.

Packer, who will take on a new role as executive director, will be replaced as chairman by Robert Rankin, a former Deutsche Bank (XETRA:DBKGn) executive in London who left that job in November to become chief executive of Packer's private company, Consolidated Press Holdings.

"Crown remains my number one business priority and passion," Packer said in a statement that coincided with Crown's earnings. "I will continue to drive key projects, including our joint business in Asia and our planned resort in Las Vegas."

Crown's net profit for the year ended June 30 missed forecasts and fell to A$385.07 million ($284.10 million) from A$655.76 million a year ago. Its normalised net profit, which removes volatility linked to big spending gamblers, also fell 19 percent to A$518.7 million, missing analysts estimates of A$531 million.

Crown's earnings were hit by an industry-wide slowdown in gambling revenue growth in the world's biggest gambling hub Macau following a Beijing government crackdown on lavish spending and corruption.

Profit from Crown's one-third stake in its Macau-focused Melco Crown Entertainment MPEL.O fell 44.6 percent, the company said.

Crown said it was optimistic about the long-term prospects of its Macau business, where Packer will remain as co-chairman.

In Australia, where casino gambling has attracted many of the wealthy Chinese gamblers that left Macau, Crown said its main floor gaming revenue increased by 6.9 percent at its Melbourne casino but only 2.6 percent at its Perth casino.

Crown's results come a day after Echo Entertainment Group Ltd EGP.AX posted a 59 percent leap in annual net profit on Wednesday but its shares fell as much as five percent on concerns that a busy renovation schedule could bite into the next year's earnings.

($1 = 1.3554 Australian dollars) (Editing by Stephen Coates and Miral Fahmy)

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