Crown Resorts Share Price Flat on New Operating Conditions (ASX:CWN)
At time of writing the share price of Crown Resorts Ltd [ASX:CWN] moved down 0.31% to trade at $9.76.
Crown spent a large part of the year closed as COVID-19 shut down public spaces and forced people into lockdown.
Crown Resorts results and eased restrictions
The emergence of the COVID-19 pandemic forced Crown resorts to stand down 11,500 employees in April over the Melbourne and Perth locations.
As the year went on the pain continued.
In June the company reported their results:
‘Australian resorts performance:
- ‘Actual revenue of $2,214.9 million, down 25.7%
- ‘Theoretical revenue of $2,091.1 million, down 29.2%
- ‘Main floor gaming revenue of $1,235.2 million, down 26.9%
- ‘VIP program play turnover of $20.4 billion, down 46.5%
- ‘Actual VIP revenue4 of $398.2 million, down 26.0%
- ‘Non-gaming revenue of $581.5 million, down 22.7%’
Understandable results given the government restrictions.
Now with Melbourne being more than 35 days COVID-19 free, the social distancing rules and lockdown laws are being wound back.
In a recent announcement, Crown outlined the revised operating conditions.
- ‘The number of members of the public permitted at any one time is limited to 50 percent of the maximum capacity for the facility stated in the occupancy permit; and
- ‘The number of members of the public permitted in each indoor space at any one time is limited by the density quotient of one person per four square metres.’
Will this push the Crown share price up?
Crown Casino is an iconic part of Melbourne’s skyline.
It’s reopening under the revised restrictions is certainly a sign that things are returning to normal.
For the company, and the future of the CWN share price there are still issues ahead though.
For instance, Moody’s recently downgraded CWN after the New South Wales regulator stopped the company from opening its $2.2 billion Sydney development in early December.
Crown then postponed the launch of their Sydney site.
Looking at the chart, it looks like many other companies that rely heavily on improving macroeconomic conditions.
From the high in June, the CWN share price fell just over the 50% retracement level before the current move up — usually a sign of strength.
If this can continue then the level of $10.86 may provide future resistance.
Should it fall back again, then the levels of $9.82 and $8.58 may be enough to halt the fall.
Crown is a profitable company in normal circumstances, but this year is anything but normal.
Crown may be a good share for a watch list in the long run, but for the time being they look to have a lot to deal with first.
For Money Morning
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