GGRAsia – Emperor Entertainment warns of full year profit decline

Emperor Entertainment warns of full year profit decline

May 03, 2016 Newsdesk Latest News, Macau, Top of the deck

Hong Kong-listed Emperor Entertainment Hotel Ltd, owner and operator of Macau casino property Grand Emperor Hotel (pictured), said it expects to record a “significant decrease” in consolidated net profit for the year ended March 31, 2016, compared to the prior-year period.

The decline is attributable to “a loss on fair value change” regarding the valuation of its Macau hotel properties “caused by [the] weakening market sentiment and continuous downturn of the property market in Macau,” the company said in a filing to the Hong Kong Stock Exchange on Friday. “[These] are non-cash items and will not have a direct impact on the operation of the group,” the firm added.

Emperor Entertainment also said it expected a “moderate decline of revenue due to [the] general economic downturn and softened gaming sentiment” in Macau.

As of end-April market wide casino gross gaming revenue in Macau has declined for 23 consecutive months measured in year-on-year terms.

In addition, the firm warned about “an exchange loss on offshore traded renminbi deposits” held by the group due to the “abrupt devaluation” of the Chinese currency against the Hong Kong dollar – the currency in which Emperor Entertainment reports its results – in the 12 months ended March 31, 2016.

The firm expects to announce its full year results by the end of June.

Emperor Entertainment reported a 57.7 percent year-on-year decrease in profit for the six months ended September 30, to HKD111.5 million (US$14.4 million), according to a November filing.

The casino at the Grand Emperor Hotel operates under a licence from Macau gaming firm SJM Holdings Ltd. The 307-room hotel had 67 gaming tables and 196 slot machine seats on the main casino concourse and a self-managed VIP room with 10 tables, according to firm’s latest interim results announcement.

Emperor Entertainment acquired in 2014 the Best Western Hotel Taipa. The venue has been rebranded as Inn Hotel Macau. It does not include gaming facilities.