GGRAsia – Asia Pioneer parent says 1Q loss can be reversed

Asia Pioneer parent says 1Q loss can be reversed

May 11, 2018 Newsdesk Latest News, Macau, Top of the deck

Asia Pioneer Entertainment Holdings Ltd, the Hong Kong-listed parent of Macau-registered electronic gaming equipment distributor Asia Pioneer Entertainment Ltd (APE), reported a net loss of approximately HKD1.7 million (US$216,619) for the first quarter of 2018. That compares to a net profit of HKD505,556 in the prior-year period.

“This turn from profit to loss was mainly due to a sharp drop in overall gross profit margin of approximately 42.4 percent from the corresponding period [in 2017] to approximately 19.7 percent for the [reporting] period, as well as a 22.7 percent drop in total revenue for the comparable periods,” the company said in a filing to the Hong Kong Stock Exchange on Thursday.

The parent company however said it expected the first-quarter net loss to “be reversed with new orders in the pipeline” for the remainder of this year.

Asia Pioneer Entertainment Holdings started trading on Hong Kong’s small-cap exchange, the Growth Enterprise Market, in November last year. Part of the firm’s commercial model involves acting as a clearing business for casino slot machines reaching the end of their life in the Macau market, in order to sell them on to other markets.

The company reported group-wide revenue of HKD13.9 million for the three months ended March 31. That includes revenue of nearly HKD13 million from technical sales and distribution of electronic gaming equipment, down 15.8 percent year-on-year.

First-quarter income derived from consulting and technical services, and repair services declined by, respectively, 71.2 percent and 47.6 percent year-on-year.

In Thursday’s filing, the parent firm expressed a more optimistic outlook for the remainder of the year.

“In technical sales and distribution [of electronic gaming equipment], we are in discussions with several customers in Macau SAR and Southeast Asia,” Asia Pioneer Entertainment Holdings noted.

“In consultancy, we are in discussions with manufacturers for consultancy contracts which will commence in the second quarter of 2018,” the firm added. The company provides consultancy to suppliers or manufacturers of electronic gaming equipment products to the casino gaming supplier market.

Earlier this week, APE said it reached a deal to be a non-exclusive distributor in Asia of some of the products from slot machine ticket printer maker TransAct Technologies Inc.

Under the deal, APE will distribute TransAct’s printers throughout Asia, with a focus on Macau, the Philippines, Taiwan and mainland China, according to a press release. In addition, APE’s company facilities will become a regional centre for warranty repairs for all of TransAct’s casino and gaming printers.