* Crown's FY earnings A$640 mln vs A$622.2 mln analyst
* Crown posts single-digit growth in Perth, Melbourne
* Sydney Harbour looms as key to domestic growth
(Adds context on rivalry with Echo, comments from analyst,
By Byron Kaye
SYDNEY, Aug 14 Sydney's picturesque harbourside
is shaping as a battleground between junior betting house Echo
Entertainment and gaming giant Crown Resorts
as their fortunes increasingly converge on Australia's most
Echo has been raking in money since launching a successful
loyalty programme last year to keep customers at its Sydney
gaming house The Star. Crown, five times bigger than Echo by
market cap, is looking to lure some of its rival's patrons as
its casinos in Melbourne and Perth post tepid revenue growth.
Crown, the world's No.6 gaming company by market value, on
Thursday reported a 35 percent jump in annual net profit,
beating analyst forecasts. But that was mostly because of a near
doubling in its share of earnings from its Macau joint venture
Melco Crown Entertainment (MCE).
The company half-owned by James Packer, the country's
third-richest person, recorded near flat earnings at its core
betting houses in Western Australia and Victoria states. Local
economies have been hit by factory closures and a mining
slowdown, resulting in earnings growth of just 2.8 percent in
Melbourne and 0.3 percent in Perth in the year to June 30.
Even as Crown builds and rebuilds properties from Macau to
Las Vegas, Australian casinos are still the company's biggest
revenue contributor. They accounted for 68 percent of its
pre-tax profit in the last financial year.
Crown is staking its future domestic growth to a A$1.5
billion luxury casino on Sydney Harbour, set to open in late
2019, with the aim of attracting a widely expected influx of
wealthy Chinese gamblers.
It will compete with Echo's existing waterfront casino just
a mile away, The Star, which is already taking steps to stop
gamblers taking business elsewhere with a loyalty program
offering free restaurant meals and hotel upgrades.
The loyalty scheme, based on airline loyalty schemes, has
250,000 members and is signing up 6,000 members per month across
all Echo properties, a company spokesman said.
On Wednesday, Echo, worth A$2.7 billion, said a 26 percent
jump in pre-tax earnings at The Star was the main reason group
net profit rose 24.6 percent.
"There's no doubt (Western Australia) and Victoria are
tracking a little bit worse than NSW and Queensland (state), at
least in terms of gaming revenues across the board," said one
gaming analyst who asked not to be named as he was not
authorised to comment publicly.
"The majority of Chinese tourists in Australia do go to
Sydney, and the other destinations less so. That was part of the
rationale for going into Sydney for Crown."
Some 759,000 Chinese visited Australia in the year to June
30, up 12 percent on the previous year, the most apart from
visitors from nearby New Zealand, according to the Australian
Bureau of Statistics.
The Chinese are Australia's No.1 tourism spenders, Tourism
Australia says, spending A$4.8 billion in 2013 and with that
amount expected to double by 2020.
That is still a small fraction of Chinese outbound tourists,
who made 97.3 million worldwide in 2013, half for leisure,
spending $129 billion in 2013, The Economist magazine reported.
"The challenge remains to get the players to Australia,"
Crown Chief Executive Officer Rowen Craigie said in a telephone
"To do that they're overlooking Macau and Singapore, they're
turning down Vegas, to get to Australia,"
Crown said normalised net profit was A$640 million ($594.75
million) for the year, up from A$473 million the previous year
and better than the A$622.2 million average estimate of 14
analysts polled by Thomson Reuters I/B/E/S.
The result included a 91.2 percent jump in profit share from
its 33.6 percent stake in MCE, to A$291.2 million. MCE's profit
rise was fuelled by a strong performance by its "mass market
table games business" at City of Dreams casino in Macau, Crown
Investors backed the result and Crown shares rose 5.6
percent to A$15.66. The shares have advanced 37 percent since
June last year.
Echo fell 4.2 percent to A$3.16, after gaining up to 7
percent on Wednesday. The benchmark rose 0.6 percent on
(Reporting by Byron Kaye; Editing by Ryan Woo)