Gaming services firm Success Dragon International Holdings Ltd reported a net loss of HKD159.3 million (US$20.4 million) for the financial year ended March 31, 2017. The Hong Kong-listed company said its loss narrowed from the HKD231.5 million recorded in the previous financial year.
In a results filing on Thursday, Success Dragon said the narrowing annual loss was due to a “decrease in operating, administrative and other expenses”, as well as a “decrease in the accounting loss arising from impairment of various assets of approximately HKD73.4 million”.
Operating, administrative and other expenses stood at approximately HKD121.9 million in the reporting period, down 30.1 percent from the previous year. The saving was mainly related to a decrease in staff costs, according to the filing.
Success Dragon reported revenue of approximately HKD151 million for the 12 months to March 31, down 1.6 percent from the prior-year period.
More than 80 percent of Success Dragon’s revenue in the reporting period came from the provision of services on management of electronic gaming equipment operations in Macau, a business segment that the company termed as “outsourced business process management”. The segment generated revenue of HKD130.8 million in the period, according to the filing.
Success Dragon reported a 9.2-percent year-on-year increase in revenue in the management of electronic gaming equipment operations in Macau, which the firm attributed to a “heavy emphasis on marketing and cost controls”. The segment recorded earnings before interest, taxation, depreciation and amortisation (EBITDA) of approximately HKD3.4 million for the 12 months ended March 31, 2017.
Success Dragon said in a January filing that the agreement between the company and the owner of One Opera Hotel in Danang of Vietnam to manage electronic gaming machines at that property had been terminated, due to an inability to get the necessary business certificate.
The company had also noted in late March that it terminated a business cooperation contract with the owner of Le Meridien Hotel in Ho Chi Ming City of Vietnam, after encountering difficulties in obtaining the necessary business certificate for operation of electronic gaming machines at the venue.
The Hong Kong-listed firm appointed new directors to its board earlier this month, including a new chief executive. The firm said this week it was terminating four agreements relating respectively to management services for greyhound racing and horse racing in Vietnam.
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”A challenge to Macau's economic model could potentially emerge over the longer term should China revise existing criminal laws that prohibit most forms of gambling in the mainland... Even in such a scenario, Fitch would expect this to occur gradually”
Fitch Ratings Inc