In light of the impact of the COVID-19 pandemic, Crown Resorts released a trading and earnings update. The company revealed that it may report an operating loss for 2021, while a further negative financial impact may be observed next year, as well.
Crown Resorts May Report Operating Loss for 2021 Fiscal Year
Australia-based entertainment company Crown Resorts released a new trading and earnings update yesterday. The company is expected to release its results for the full year, ending June 30, 2021, on August 30, 2021; however, with the recent release, Crown Resorts is already preparing investors that operating loss for the 2021 fiscal year may be reported. Furthermore, Crown Resorts revealed that this year had a significant financial impact due to the COVID-19 pandemic. The company outlined that its properties were closed for various periods. Additionally, it said that COVID-related restrictions related to capacity limits and physical distancing further impacted the financial results this year.
“Crown expects to record a statutory loss after tax for the full year ended 30 June 2021.”Crown Resorts
The company revealed that it “expects to report theoretical” EBITDA (earnings before interest, taxes, depreciation and amortization) before closure costs and significant items of some $240-$250 million. Furthermore, it said that it expects to record a “statutory loss after tax for the full year ended 30 June 2021.” However, Crown stressed that the statutory result will be reviewed by the Board of Directors and management, as well as “external auditors as part of normal year-end processes.”
According to the latest financial update, the company has invested $450 million in its Crown Sydney resort, which has a price tag of some $1.7 billion. This, according to Crown, may leave the company with net debt of approximately $900 million.
2022 May Be Even More Challenging Than 2021
Acknowledging that it continues to operate in an uncertain environment, Crown expects that multiple factors may impact the company’s financial performance in 2022. The company expects that COVID-related closures and operating restrictions will continue to negatively impact the company’s performance. Furthermore, Crown said that travel restrictions, as well as border closures, may also result in a negative impact.
“Performance is expected to continue to be negatively impacted by COVID-19 related closures and operating restrictions as well as travel restrictions, including ongoing international border closures.”Crown Resorts
Additionally, Crown acknowledged that the ongoing regulatory processes may also potentially impact the company’s performance. This relates to an investigation over claims for non-compliance with anti-money laundering regulations launched last year by the Victoria Commission for Gambling and Liquor Regulation (VCGLR).
As Reuters revealed last month, the initial deadline for the investigation set for August 1 was extended to October 15 by the Victorian government. In that line of thought, the operator expects to incur an increase in corporate costs during the 2022 fiscal year, as well as legal and associated costs while the regulatory processes continue. Although Crown expects difficulties ahead, the company vowed to continue monitoring and responding to the impacts of the unprecedented operating environment.