Melco International Development Ltd, controlled by gaming entrepreneur Lawrence Ho Yau Lung (pictured), reported on Wednesday a net profit of HKD10.37 billion (US$1.34 billion) for the first half of 2016. That compares to a net profit of HKD111.1 million in the prior-year period, the company said in a filing to the Hong Kong Stock Exchange.
The company said the strong profit growth was mainly due to a special gain as a result of having taken control of Asian casino developer Melco Crown Entertainment Ltd.
Melco International became Melco Crown’s single largest shareholder in May, as its Australian partner in the Asian casino operator – Crown Resorts Ltd – decided to reduced its stake. Melco International now holds 37.89-percent of Melco Crown.
Melco International said the incorporation of Melco Crown as a subsidiary demonstrates Melco International’s confidence in the Macau gaming market, “which the group expects to regain momentum in the fourth quarter of the financial year”.
Melco International declared a special interim dividend of HKD0.015 per share, totalling approximately HKD23.2 million. The dividend is to be paid on September 30, 2016.
“We are thrilled that Melco has become the single largest shareholder of our core gaming arm and key revenue driver, Melco Crown Entertainment, earlier this year,” said Mr Ho, Melco International’s chairman and chief executive, in a statement included in a separate press release.
Mr Ho and Melco International – or entities controlled or led by Mr Ho – have casino interests in Macau, in the Philippines, and in the Russian Far East. It has also announced a strategic cooperation arrangement – via a subsidiary – to provide consultancy services for a casino project on Jeju Island, South Korea.
“Outside Asia … Melco is also actively evaluating development opportunities in emerging gaming jurisdictions such as Spain and Cyprus, as part of our strategic expansion plan to further diversify the revenue stream and strengthen our international presence,” said Mr Ho in Wednesday’s statement.
On Wednesday, Summit Ascent Holdings Ltd – a company controlled by Mr Ho, and which is also the lead developer of the Tigre de Cristal casino resort in the Russian Far East – said it swung to profit in the first half of 2016.
The firm reported a net profit attributable to shareholders of HKD6.3 million for the six-month period ended June 30, as compared to a loss of HKD43.8 million in the corresponding period in 2015.
The main contribution to the first half results of Tigre de Cristal came from the casino’s rolling chip business, which targets VIP customers from Northeast Asia.
Summit Ascent said the casino’s rolling chip turnover has been increasing on a month-on-month basis since the official opening on November 11, 2015. Monthly rolling chip turnover increased from HKD258 million in November 2015 to HKD2.0 billion in July 2016 and HKD2.2 billion in August 2016 respectively, the firm said in a filing.
“This validates the key aspect of our investment thesis – that the Primorsky Krai Integrated Entertainment Zone is the ideal location to capture the drastically underserved gaming demand from Northeast Asia,” added Summit Ascent.
In April, Summit Ascent gained control of Tigre de Cristal, by having a majority of the directors on the board of the joint venture firm that controls the Russian casino project.
Summit Ascent announced earlier this month that it has a non-binding agreement with Kangwon Land Inc in South Korea for “potential areas of cooperation and strategic partnership”.
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”We do not believe that reopening the advance notice nomination deadline [for board directors] is appropriate or justified”
Daniel Boone Wayson
Chairman of the Wynn Resorts board of directors