Hong Kong-listed Asia Pioneer Entertainment (APE) Holdings Ltd reported on Thursday a first-half net loss of nearly HKD29.0 million (US$3.7 million), up 429 percent from the prior-year period. The majority of such loss – or about HKD24.9 million – was booked in the three months to June 30, said the company in a filing. It blamed the performance on the impact of the Covid-19 pandemic on its business.
The group’s interests include Asia Pioneer Entertainment Ltd, a Macau-based distribution, sales and servicing business for casino slot machines and electronic table games.
In light of the health crisis, APE Holdings stated that it had decided to focus its operations on the Macau market and “only selectively sell electronic gaming equipment to Southeast Asian countries”.
APE Holdings also said it would seek fresh business opportunities that could supplement its core business. The group said it signed in the first half a consulting and project management agreement to advise a casino operator in Vietnam.
APE Holdings said its revenue for the period fell by 46.0 percent year-on-year, to HKD11.8 million. It attributed the lacklustre performance to a 50.7-percent decrease in income from technical sales and distribution of electronic gaming equipment during the period, compared to first-half 2019.
The company said its performance for the six months to June 30 was “adversely affected” by the outbreak of Covid-19, leading to “weaker demand for technical sales and distribution of electronic gaming equipment”. It further noted that some outstanding orders for electronic gaming equipment it had received, were either delayed or cancelled.
“Demand for the group’s electronic gaming equipment products and services has been adversely affected and the group is concerned if business activities can quickly return to pre-Covid-19 levels,” added APE Holdings.
The casino gaming equipment distributor said it had taken actions to reduce its operating costs during the first half. Operating expenses fell by 30.8 percent year-on-year, to HKD10.5 million, “primarily due to decreases in operating and staff costs.”
APE Holdings announced in May that it had terminated finance lease agreements with two companies, claiming that those firms failed to pay lease rental fees. The gaming supplier said in its Thursday filing that, as a result of such termination, it recorded a one-time impairment loss of approximately HKD22.9 million in finance lease receivables.
The firm said additionally that it was working to collect some “outstanding amounts” from the two companies, and that it would “take appropriate legal actions when necessary”. It said such amounts reached approximately US$376,730 in aggregate.
The company announced in July that it planned to start “sports and sports-related entertainment businesses” as it coped with challenges posed by Covid-19.
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Amount that each Macau casino operator paid for the circa six-month extension of their respective contract