SYDNEY (REUTERS) - Billionaire James Packer stepped down as chairman of Australia's Crown Resorts Ltd on Thursday but said he would remain heavily involved in the company he owns half of as it faces declining revenues in the world's biggest gambling hub Macau.
Mr Packer's surprise decision to take a less-public role in Crown, Australia's biggest casino operator by market value, initially sent shares down to a one-month low as it coincided with a steeper-than-expected drop in its annual net profit.
The stock, however, recouped some of its losses after it became clear that Packer would still be involved in key projects in Crown's A$10 billion (S$10.29 billion) development plans as well as its online business.
"Crown remains my number one business priority and passion," Mr Packer said in a statement. "I will continue to drive key projects, including our joint business in Asia and our planned resort in Las Vegas."
Robert Rankin, a former Deutsche Bank executive who became chief executive of Mr Packer's private company Consolidated Press Holdings, was named as Crown's new chairman. Mr Packer will remain co-chair of Macau-focused Melco Crown Entertainment.
The management changes come as Crown's earnings from Macau, which make up about 40 per cent of its total revenue, shrank 44.6 per cent amid a downturn in the casino industry following a Chinese government crackdown on lavish spending and corruption.
The declining Macau earnings pushed Crown's normalised net profit, which removes volatility linked to big spending gamblers, down 19 per cent to A$518.7 million, missing analysts estimates of A$531 million.
In a statement, Crown said it was optimistic about the long-term outlook for Macau, where it is due to open a new casino this year, even as it said the downturn in the industry's gross gaming revenue had accelerated in the second half.
Credit Suisse analysts, however, singled out Crown as one of the Australian companies likely to suffer the most from the recent devaluation of the yuan given its exposure to Macau.
In Australia, where casino gambling has attracted many of the wealthy Chinese gamblers that left Macau, Crown said its main floor gaming revenue increased by 6.9 per cent in Melbourne and 2.6 per cent in Perth over the 2014/15 financial year.
The company did not say how much of this increase was due to Chinese visitors, but rival Echo Entertainment Group Ltd said its annual net profit had leaped 59 per cent largely due to higher revenues from Chinese gamblers.