SYDNEY/HONG KONG (Reuters) - Australia's biggest casino operator Crown Resorts Ltd <CWN.AX> said underlying first-half profit rose slightly as a surge in turnover from Chinese high rollers offset subdued local business, sending its shares on their biggest rally in a year.
Though the profit rise for the world No. 7 casino operator was marginal, the barnstorming contribution from so-called VIP gamblers signals the end of a downturn in a market segment courted by casino operators around the world.
James Packer's 47 percent-owned company was among the worst hit, abruptly retreating from all its offshore interests after a Beijing-led crackdown on gambling resulted in the jailing of more than a dozen of its staff in 2016.
On Thursday however Crown said VIP turnover at its flagship casino in Australia's second city Melbourne leapt 16 percent in the six months to end-December, helping the company grow half-year profit 0.6 percent to A$192.4 million ($150 million), rather than the decline forecast by analysts.
"It's probably a reflection of the marketing efforts that have gone in, and reinforces the strength of Australia as a destination," Crown Executive Chairman John Alexander said on an analyst call, referring to holidaying Asian gamblers.
"No doubt there's been a lift in the region," Alexander added, noting a bounce in gambling on the Asian island gambling hub Macau.
Crown shares were up nearly 5 percent in afternoon trading, their biggest intraday gain since February 2017, while the broader market was flat.
A week earlier, No. 2 Australian casino group Star Entertainment Group Ltd <SGR.AX> also reported a recovery in turnover from Asian gamblers.
Last month, Macau, the only Chinese territory where gambling is legal, reported its first rise in gambling turnover in three years, up a fifth, a sign a government campaign against shows of wealth among public officials was losing its deterrent effect.
Casinos in Cambodia and the Philippines are also posting stellar growth.
"It's a combination of expanding junket presence, better economy and a better political climate," said Michael Ting, an analyst at CIMB in Hong Kong, in an email.
Jamie Soo, an analyst at Daiwa in Hong Kong, said the recovery in VIP gambling had coincided with "an acceleration in high-end consumption growth in China".
Crown's underlying, or "normalised", profit included re-calculations to give a consistent win rate and present a clearer picture of its performance. Including an unusually low win rate for the period, Crown said half-yearly net profit fell 34 percent.
The company declared an interim dividend of 30 Australian cents, in line with the previous corresponding period.
(Reporting by Byron Kaye in SYDNEY and Farah Master in HONG KONG; Editing by Christopher Cushing)
