China Star Entertainment 1H positive profit warning
Casino services firm China Star Entertainment Ltd said on Friday it expected its first half 2014 profit to rise by up to 95 percent year-on-year – despite a likely 6-percent fall in gross profit for the period, due to decreased turnover.
In the first half of 2013, the firm – which controls Casino Lan Kwai Fong (pictured) – reported a profit of approximately HKD60.79 million (US$7.8 million).
The firm has recently been reorganising its business including its arrangements with VIP gambling operators at its casino hotel on Macau peninsula. The venue runs on a gaming licence from local concessionaire SJM Holdings Ltd.
The reasons for the likely improvement at China Star Entertainment in the six months to June 30 include “substantial decrease in impairment loss recognised in respect of the intangible assets of…gaming promotion operations of approximately HKD34 million from HKD41 million in the corresponding period of the previous year,” the firm told the Hong Kong Stock Exchange.
There was also a decrease in finance costs of “approximately HKD11 million…mainly caused by the full conversion of the outstanding 8 percent convertible bonds of the company into shares of the company on 31 March 2014 and thus decrease [in] the interest expenses for the period,” added the latest filing.
The effect of such improvements is “partially offset by approximately 6 percent decrease in the figure of gross profit as compared to the corresponding period of the previous year due to decrease in turnover,” said China Star Entertainment.
The firm in July said it was raising about HKD538.5 million to expand its hotel and gaming operations.
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