Fitch: Crown and Echo Resilient to Macro Pressures and Expansion Risks

(The following statement was released by the rating agency)Link to Fitch Ratings' Report: Australia Gaming Dashboard 2H15https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=870850SYDNEY, September 25 (Fitch) Fitch Ratings says the credit profiles of Australia's two largest listed casinos - Crown Resorts Limited ("Crown", BBB/Stable) and Echo Entertainment ("Echo", NPR), continue to be stable against the backdrop of a weakening macroeconomy and sizable expansion plans.Crown's and Echo's credit profiles benefit from operating in well-regulated markets and owning a portfolio of properties which generate strong operating cash flows. As Australian casinos are driven by domestic patrons, their growth has been more stable than those in Macao. Their focus on mid-market patrons has resulted in lower receivables outstanding.However, both casinos have sizable capex pipelines. Crown's planned capex (excluding licence payments) on the Melbourne and Perth properties is about USD1.27bn for FY15-FY18. Echo is incurring substantial capex on its Gold Coast property, and has won the Queens Wharf Brisbane bid.The new projects will not generate revenue for at least the next three years during the construction phase. Robust operating cash flows and low-to-moderate leverage should enable Crown and Echo to implement expansion successfully despite the ongoing macro weakening. Financial leverage, however, may be under pressure, especially for Crown.Contact:Nandini Vijayaraghavan, CFADirector+65 6796 7216Fitch Ratings Singapore Pte Ltd6 Temasek Boulevard#35-05 Suntec Tower FourSingapore 038986Kelly AmatoAssociate Director+61 2 8256 0348Vicky MelbourneSenior Director+61 2 8256 0325Media Relations: Leni Vu, Sydney, Tel: +61 2 8256 0304, Email: leni.vu@fitchratings.com.Additional information is available at www.fitchratings.com.ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S FREE WEB SITE AT WWW.FITCHRATINGS.COM. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE, AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE CODE OF CONDUCT SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE. Fitch Australia Pty Ltd holds an Australian financial services licence (AFS licence no. 337123) which authorises it to provide credit ratings to wholesale clients only. Credit ratings information published by Fitch is not intended to be used by persons who are retail clients within the meaning of the Corporations Act 2001.