Neptune Group Ltd, a Hong Kong-listed investor in the Macau VIP gambling sector, said in its 2015 annual report filed on Friday that it expected to see improvements in its Chinese VIP gambling business – but at a “snail’s pace”.
“The sector has experienced the worst period for quite some time… we do see improvement around the corner. However improvements will come at a snail’s pace,” stated Neptune Group’s chairman Danny Xuda Huang.
He added: “… those operators that are forecasting quick and strong rebound may be overly optimistic.” That view is in contrast to some industry observers that have predicted a recovery in VIP revenues based on policy support from the central and local governments.
On September 25, Neptune Group announced a net loss of HKD828 million (US$106.8 million) for the year ended June 30, 2015. It made a profit of HKD148.8 million in the prior-year period.
Neptune Group said its gaming revenue fell by 33 percent to HKD473.6 million in the 12 months ended June 30.
“We face unsettling challenges [in order] to consider how to sustain our business under such difficult circumstances,” it warned in a statement accompanying those results. It added that it could leave the Macau VIP gaming industry if the “situation doesn’t correct itself in coming years”.
The firm’s accounts for the year included an impairment loss on intangible assets of HKD875.2 million regarding investments in several VIP rooms.
On Thursday Macau’s gaming regulator announced some details of stricter accounting rules that will apply to the city’s junket operators with effect from next year.
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Analyst at Union Gaming Securities Asia