The Crown Resorts Ltd (ASX: CWN) share price is dropping lower with the market on Thursday.
At the time of writing the casino and resorts operator's shares are down 1.5% to $8.14.
What did Crown announce?
This morning Crown followed the lead of rival Star Entertainment Group Ltd (ASX: SGR) by releasing an update on how it is being impacted by the coronavirus pandemic and how it is supporting employees.
In relation to the cessation of gaming activities and other non-essential services at Crown Melbourne and Crown Perth, the standing down of its employees is now substantially complete.
According to the release, the company has progressively stood down, on either a full or partial basis, approximately 95% or over 11,500 of its employees. The only employees that remain working are those in business-critical functions.
Pleasingly, Crown is supporting its employees during these tough times. It has agreed to provide an ex gratia payment of two weeks' pay to those full-time and part-time employees who have been stood down. It is also paying a lump sum payment of $1,000 to eligible casual workers.
In addition to this, its employees will also be able to draw down on existing annual and long-service leave entitlements in a range of flexible manners.
The company's chief executive officer and managing director, Ken Barton, and certain other senior management have taken a 20% reduction in fixed remuneration until June 30. Crown's Chair and non-executive director fees have also been reduced by 20% over the same period.
All in all, this is expected to reduce its underlying operating cash costs to between $20 million to $30 million per month while gaming and other non-essential business activities remain suspended.
Mr Barton commented: "We have taken the tough but necessary decision to stand down a large number of our employees. I have a deep gratitude to our employees for their understanding and commitment during this painful and highly uncertain time."
"We are continuing to investigate ways in which we can support our employees on an ongoing basis. Crown welcomes the Commonwealth Government's JobKeeper scheme, which will be critical in keeping our business and our employees connected," he added.
Can Crown afford this?
Management believes that Crown is well-positioned to weather the storm. So much so, it advised that it will continue to pay its interim dividend on April 17.
It has a cash balance of $500 million and over $1 billion in additional debt facilities.
Management notes that this reflects Crown's strong financial position as it enters this period of capital market, economic and social disruption.
What about Crown Sydney?
Crown advised that it intends to continue the construction of the Crown Sydney project as planned.
Barring any further delays arising from the impact of COVID-19, it remains on track to complete the Crown Sydney Hotel Resort by the end of the year.
Pleasingly, the project cost remains unchanged, with the gross project cost expected to be approximately $2.2 billion and the net project cost expected to be approximately $1.4 billion.
