By Rebecca Thurlow
SYDNEY--Australian billionaire James Packer stood down as
chairman of Crown Resorts Ltd., his casino business, saying he
would take charge instead of the company's global expansion.
In a statement Thursday, Mr. Packer said he was handing over the
chairmanship to Robert Rankin, a fellow board member, as the
company reported a 41% slump in annual profit mainly on dwindling
revenue from operations in the gambling hub of Macau.
As well as being a Crown director, Mr. Rankin was appointed
earlier in the year to lead Mr. Packer's private company
Consolidated Press Holdings, which owns just over 50% of Crown.
Previously, he worked as an investment banker for Deutsche Bank AG
in London.
For his part, Mr. Packer will become an executive director at
Crown with responsibility for developing its pipeline of global
resorts, including one planned in the Las Vegas Strip.
"Given our global growth and aspirations, this is the right time
for the company to make this change," the billionaire said. He
added that he will remain co-chairman of Crown's Alon Resort
project in Las Vegas and the Melco Crown Entertainment Ltd. joint
venture in Macau.
Over the course of the decade, the 47-year-old Mr. Packer has
built Crown into one of Australia's biggest gambling and
entertainment groups, with a market value of A$9.8 billion. He
created it out of the gambling assets of Publishing and
Broadcasting, the media company owned by his father Kerry Packer.
After his father's death, James Packer chose to move away from
media to focus on building a world-wide gaming empire.
"Crown remains my number-one business priority and passion," Mr.
Packer said on Thursday. "My vision for the company is to be one of
the world's best integrated resort and entertainment
providers."
The Melbourne-based company said annual net profit slumped to
385 million Australian dollars (US$284 million). The main cause was
a plunge in revenue at Melco Crown--owner of the City of Dreams
casino in Macau--following China's crackdown on money laundering,
which has scared away many big gamblers from the region.
Earnings in the year through June also took a hit from costs
associated with an abandoned plan to build a casino in Sri Lanka,
and from a write-down of the value of Crown's almost 25% stake in
U.S.-based Cannery Casino Resorts to zero. Crown's Australian
properties fared better, shrugging of weak consumer sentiment at
the end of the country's long mining-boom to grow revenue by 13% in
the fiscal year. Crown also owns casinos in London.
The company has had its fair share of setbacks in attempts to
expand overseas.
During the financial crisis, several of Mr. Packer's earlier Las
Vegas investments went awry, including the Fontainebleau casino
resort, which had to halt construction and sell off furniture after
entering bankruptcy protection in 2009.
Crown currently plans to build its Alon Resort casino complex on
Las Vegas Boulevard, close to where the failed Fontainebleau
project was to be based, after acquiring a 34.6 acre site for
US$280 million a year ago.
It has joined with Oaktree Capital Management LP and former Wynn
Resorts Ltd. executive Andrew Pascal to develop the resort, which
it aims to complete by 2018. The investors are part of a growing
circle betting on a recovery in the world's second-largest gambling
market, after the financial crisis halted the building boom in the
city.
"James has put his heart and soul into the company and worked
tirelessly to build one of Australia's most successful tourism and
entertainment businesses," said Mr. Rankin. He added that while Mr.
Packer may be leaving the chairman's role, he would have day-to-day
engagement with Crown's development.
Closer to home, Crown is planning to open a new six-star casino
on the foreshore of Sydney Harbour in 2019. Earlier in August, it
lost to rival Echo Entertainment Group Ltd. in a tender to develop
a new casino resort complex in Brisbane.
Write to Rebecca Thurlow at rebecca.thurlow@wsj.com`
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