Gaming services firm Success Dragon International Holdings Ltd reported a net loss of HKD28.0 million (US$3.6 million) for the six months ended September 30. The Hong Kong-listed company said the result was an improvement from a loss of HKD29.6 million recorded in the prior-year period.
In a results filing on Friday, Success Dragon said the improved results related to a decrease in administrative and other expenses. Operating, administrative and other expenses stood at approximately HKD44.0 million in the reporting period, down 21.6 percent from the previous year. The saving was mainly related to the discontinuation of an operation to provide information technology services to Vietnam’s pari-mutuel betting sector, according to the filing.
Success Dragon said in June it was terminating four agreements relating respectively to management services for greyhound racing and horse racing in Vietnam. It cited “adverse” regulatory conditions – including a cap on daily betting amounts for Vietnamese nationals, and a ban on international simulcast of races – as factors in the decision.
Success Dragon reported revenue of approximately HKD65.8 million for the six months to September 30, down 19.5 percent from the prior-year period.
Around 91.8 percent of Success Dragon’s revenue in the reporting period came from the provision of services on management of electronic gaming equipment operations in Macau, a business segment that the company termed as “outsourced business process management”. The segment generated revenue of HKD60.4 million in the period, down by 5.7 percent in year-on-year terms, according to the filing.
Success Dragon said the segment ended the reporting period with a loss of HKD9.2 million compared with a loss of approximately HKD2.0 million in the prior year period. The firm said the negative result was “mainly due to heavy operating cost and worse performance of one of the operation outlets” located at the Landmark Macau. The latter is a casino hotel located on Macau peninsula.
“As a result, the management of the group decided to cease such operation at the Landmark Macau,” Success Dragon stated.
Landmark Macau is owned by Hong Kong-listed Macau Legend Development Ltd. The latter announced earlier this month it was selling the property to a group of Macau-based investors.
Success Dragon still provides services on management of electronic gaming equipment operations to Casino Casa Real on the Macau peninsula, and to Casino Grandview on Taipa island.
During the reporting period, the firm disposed of its operations related to packaging products for luxury goods. The company “considered that the line of business undertaken by such segment will no longer bring satisfactory return to the group in future,” stated Friday’s filing.
The document added: “As a result, on August 31, 2017 the company disposed such operation to an independent third party… at a cash consideration of HKD2 million.”
Looking ahead, the management of Success Dragon said the firm would continue to look for new opportunities for business growth. “As at the date of this interim results announcement, the group had no plans for material investments or acquisition of capital assets,” the filing added.
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”We have not had discussions about the concession renewal with the [Macau] government. We have taken the view that if we continue to deliver on what we expect is the expectations from operators, then we will be treated fairly”
Chairman and chief executive of MGM Resorts, the parent of Macau casino operator MGM China