Iao Kun Group Holding Co Ltd – an investor in the Macau VIP gambling segment – reported in the first three months of 2017 a dramatic year-on-year narrowing of its net loss.
The first-quarter net loss attributable to shareholders was US$446,634, or US$0.01 per share – basic and diluted – compared to a net loss of US$3.5 million, or US$0.06 per share, for the prior-year period.
During the first quarter of 2017, the company recorded a reversal of bad debts amounting to US$200,000.
Iao Kun, a business that had originally listed on Nasdaq in July 2010 as a Macau VIP gambling room investor, announced in late April this year that it had changed its name to LiNiu Technology Group. Earlier that month the group had announced it had set up the LiNiu Network, an electronic trading platform focused on the Chinese agricultural sector.
The group said in its discussion of first-quarter trading: “After the company closed four VIP gaming rooms at the Sands Cotai Central casino, Galaxy Macau, StarWorld and Le Royal Arc in Macau in 2016, the company maintained minimal operations and temporarily relocated the Macau VIP gaming operation to Altira complex, which provides remuneration at a predetermined fixed rate commission.” The latter was a reference to Altira Macau, Melco Resorts and Entertainment Ltd’s casino hotel in Taipa.
The group noted that the narrowing in first-quarter net loss was “primarily due to a significant decrease in commission to junket agents as a result of minimal revenue in the first quarter of 2017”.
It added: “The lower selling, general and administrative expenses for the three months ended March 31, 2017 was primarily due to no longer paying management fees… and lower salaries [payments] due to the closure of four VIP rooms in 2016.”
The group’s first-quarter results also touched on the fact that in March, Macau’s Court of First Instance declared the bankruptcy of Sang Lung Gaming Promotion Co Ltd, a VIP gambling promoter linked to Iao Kun, following a petition by Galaxy Casino Co Ltd – a subsidiary of Macau casino operator Galaxy Entertainment Group Ltd.
Iao Kun stated in its latest filing: “The company’s management, upon receipt of further legal advice, filed an appeal to the Macau First Instance Court. Currently, the bankruptcy process will be stopped in the stage of liquidation.”
It added: “If the appeal is not successful, the plaintiff may claim the relevant credits against the debtors of Sang Lung which may equal the entire default of lines of credit in the amount of approximately US$26.9 million”.
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”Ramp ups [of new Macau casinos] are taking a little bit longer. The market is somewhat volatile at the moment, but we continue to look at all the opportunities and are still very comfortable that things are starting to move ahead”
Chief executive of MGM China Holdings