Genting unit Echo profit beats expectations

by **Cals** Thu 14 Aug 2014, 01:22

Business & Markets 2014

Written by Reuters

Wednesday, 13 August 2014 10:35

SYDNEY (Aug 13): Australian gaming company Echo Entertainment Group topped market expectations as it posted a 12 percent rise in full-year earnings on Wednesday, boosted by an improved performance from its Australian casinos.

Echo, which is facing tough competition from larger rival Crown Resorts Ltd, reported normalised earnings before interest, tax, depreciation and amortisation and excluding significant items of A$439.1 million ($406.9 million).

That was higher than the raised guidance of A$430-A$435 million that the company gave in June as revenue rose 3.9 percent to A$1.81 billion, generated mostly by the domestic gaming business.

Echo shares gained 5.3 percent to A$3.37 in Sydney trading.

Managing Director Matt Bekier, who took over the top job in May as part of a management overhaul, said the company expected to see continued improvement in fiscal 2015 as it invests in its flagship Star property.

Expanded facilities and a positive customer response to a new loyalty program had already paid off at Echo's flagship property, he said.

Echo, which counts Southeast Asia's biggest gaming group Genting Bhd among its major shareholders, has been under pressure to improve its performance since it lost a campaign last year to retain its exclusive gaming licence in Sydney.

Crown was granted permission to open a high roller facility in late 2019 and is also challenging Echo's current sole licence in Brisbane, where the state government has called for expressions of interest for a second casino development.

Echo earlier this year entered into an agreement with Chow Tai Fook Enterprises and Far East Consortium (Australia) to prepare a joint proposal to develop an entertainment precinct and integrated resort at its Brisbane site.