Hong Kong-listed Asia Pioneer Entertainment Holdings Ltd said its loss for the first nine months of 2019 widened, but the group expects an improvement in revenue and gross margins in the fourth quarter, according to a Wednesday filing.
Asia Pioneer Entertainment Holdings owns Asia Pioneer Entertainment Ltd (APE), a Macau-based distributor of gaming equipment. APE gets much of its revenue from selling and servicing slot machines and electronic table games.
On Wednesday, Asia Pioneer Entertainment Holdings reported to the Hong Kong Stock Exchange – where it is listed on the small-cap board – that the group made a loss of almost HKD2.7 million (US$345,000) in the nine months to September 30, having had a loss of slightly above HKD1.6 million in the equivalent period a year earlier.
The firm said the loss was mainly attributable to an increase in operating expenses from almost HKD15.8 million in the first nine months of 2018 to approximately HKD24.1 million in the latest reporting period. The company added such jump had been spurred by increases in directors’ remuneration, up by 133.5 percent in year-on-year terms to almost HKD4.5 million. Rises in other staff costs and in other general operating expenses also contributed to the increase in operating expenses, said the firm.
The group’s revenue for the nine months to September 30 jumped by about 31.4 percent to HKD53.5 million. The company attributed the rise in revenue mainly to an increase in income derived from technical sales and distribution of electronic gaming equipment, and from sales of spare parts.
Asia Pioneer Entertainment Holdings said that during the first nine months of 2019 it had sold a total of 202 electronic gaming equipment seats/stations. “For the fourth quarter of 2019… we are expecting new direct purchase orders of around 80 seats,” the firm added.
A total of 95 percent of the group’s revenue during the first nine months of 2019 was derived from customers in Macau, Asia Pioneer Entertainment Holdings stated.
“Trading in our core business during the period has been within the expectations of our management with a robust third quarter performance in sales from Macau customers,” the company’s report said.
It added: “Management is optimistic that the group’s revenues and gross margins will further improve in the fourth quarter.”
Asia Pioneer Entertainment Holdings said it expected to secure “a new sale” – within the final quarter of 2019 – of a food safety system by TransAct Technologies Inc to a Macau-based customer.
APE became last year a non-exclusive distributor in Asia of some of TransAct’s products.
The board of Asia Pioneer Entertainment Holdings said it would not declare a dividend for the January to September period.
In March, the firm reported that its annual net profit rose to HKD20.7 million in 2018 from just over HKD4.49 million the year before, on revenue that grew to just under HKD109.62 million from about HKD86.06 million.
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”It was a strong quarter for our global gaming business. Unit sales of gaming machines were 44-percent greater than the prior year period, driven by a 62 percent increase in replacement units”
Chief executive of gaming and lottery equipment provider IGT