The Crown Resorts Ltd (ASX: CWN) share price is under pressure on Monday morning following the release of an earnings guidance update.
At the time of writing, the casino and resorts operator's shares are down 1% to $11.81.
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What did Crown announce?
According to the release, the company highlights that it has suffered from significant disruption caused by the COVID-19 pandemic. This includes its properties being closed for various periods of time and COVID-19 related operating restrictions applying throughout the period. The latter has seen capacity limits and physical distancing protocols.
In light of this, for the full year ended 30 June 2021, Crown expects to report theoretical earnings before interest, tax, depreciation and amortisation (EBITDA) before closure costs and significant items of between $240 million to $250 million.
This will be down more than 50% on FY 2020's theoretical EBITDA before closure costs and significant items of $503.8 million. That itself was down 37.2% on FY 2019's numbers.
Including closure costs, Crown's theoretical EBITDA before significant items is expected to be between $90 million and $100 million.
On the bottom line, Crown is expecting to record a statutory loss after tax for the full year. However, this statutory result remains subject to review by the Board and management and Crown's external auditors.
In addition to this, the company revealed that it expects to report net debt (excluding working capital cash) of approximately $900 million at the end of FY 2021. It notes that the $450 million project finance facility to support the construction of Crown Sydney has been repaid from settlements to date from Crown Sydney apartment sales.
What about FY 2022?
Crown notes that it continues to operate in an uncertain environment with a number of factors expected to impact its financial performance throughout FY 2022.
These include COVID-19 related closures and operating restrictions, a significant player review, investments in resourcing and capability, and regulatory processes.
In respect to the latter, management notes that the company is the subject of a number of regulatory processes. It has warned that the outcome of those regulatory processes may potentially impact Crown's financial performance. It also expects to incur increased corporate costs throughout the 2022 financial year, including legal, consulting and associated costs, whilst these regulatory and any resulting processes continue.
