Casino and casino cruise ship investor Genting Kong Kong Ltd swung to a US$502.3-million loss in 2016, compared to a US$2.11-billion profit in the prior year. The news was given in a Thursday filing to the Hong Kong Stock Exchange.
The group had in January flagged a likely US$550-million loss for the 12 months to December 31.
In 2015 the group had benefited from a net gain of US$658.8 million on disposal of certain shares in Norwegian Cruise Line Holdings Ltd, and from a one-off accounting gain on the reclassification of that cruise brand from an “associate” to an “available-for-sale investment” amounting to nearly US$1.57 billion.
In 2016, Genting Hong Kong reported a basic and diluted loss per share of US$0.0592, compared to a profit per share of US$0.2550 and US$0.2548 respectively in the previous year.
The group said in a commentary on its 2016 cruise business: “Passenger ticket revenue and on-board revenue increased significantly in 2016 due to the full year contribution from Crystal Cruises. However, the one-time start-up and marketing costs for the launch of new Dream and Crystal Cruises’ brands and products in 2016, together with higher overall operating and selling, general and administrative expenses – including depreciation and amortisation – resulted in an increase in segmental loss of our ‘cruise and cruise-related activities’.”
Such segmental loss was US$106.2 million, compared to a loss of US$49.5 million in 2015.
When non-cruise activities – namely revenue from on-shore hotels, travel agents, aviation, entertainment, shipyard businesses and dividend income from investments – were also taken into account, the group’s operating loss for the year across the two segments was US$504.2 million.
The report noted that from July to November this year, the group’s SuperStar Virgo casino cruise ship (pictured) will begin offering seven-night trips to Osaka; Tokyo; Shimizu – the port nearest to the tourist hotspot of Mount Fuji – and Kagoshima.
Starting in April 2017, the group’s vessel Genting Dream will operate five-night cruises from its dual homeports of Hong Kong and Nansha, Guangzhou, in mainland China, to Okinawa in Japan.
Osaka, Tokyo and Okinawa have all been mentioned by investment analysts as possible locations for Japanese casino resorts.
In December last year, Japan’s parliament passed legislation to make legal the business of casino gambling in that country, although it is likely to be beyond the year 2021 before a resort is ready for operation, investment analysts have said.
Japanese gamblers are currently an important customer segment for some of South Korea’s foreigner-only casinos. In early February, South Korea’s Paradise Co Ltd said Japanese VIP players ranked second, with KRW1.23 trillion (US$1.09 billion), or 23.3 percent, in terms of contributing to the group’s total casino drop during 2016.
Genting Hong Kong gave commentary in its 2016 results on its recently acquired German shipyard business.
It stated: “Higher revenue of non-cruise activities was primarily contributed by revenue from yard repairs and conversion activities as a result of the acquisition of shipyards in Germany.
“The increase in segmental loss of our ‘non-cruise activities’ was mainly due to additional depreciation and amortisation, start-up and acquisition related costs arising from its shipyard operations and new-building activities.”
Genting Hong Kong’s share of profit from Travellers International Hotel Group Inc, operator of the Philippine casino venue Resorts World Manila, totalled US$32.7 million, compared with US$33.9 million in 2015.
It said the difference was “primarily due to unrealised foreign exchange losses on the outstanding US$300-million bond resulting from the depreciation of Philippine peso.”
Oct 26, 2021Customers at Kangwon Land, South Korea’s only casino open to local players, will from November 1 need to have a “vaccine pass” proving they are fully-jabbed against Covid-19, before they can...
Oct 26, 2021
”“The Royal Commission finds Crown is unsuitable to hold a casino licence [in Melbourne] on the basis that it has engaged in conduct that is ‘illegal, dishonest, unethical and exploitative'”
Report from the Royal Commission into the Casino Operator and Licence
State of Victoria, Australia