Hong Kong-listed property developer Far East Consortium International Ltd saw its latest interim revenue spurred by gaming operations in Europe and a dividend from its investment in Australian casino operator The Star Entertainment Group Ltd .
According to Far East’s unaudited results for the six months ended September 30, the reporting period was the first to show benefit from gaming operations at three casinos in Czech Republic as well as from its investment in The Star Ent.
Far East’s total revenue from gaming operations was approximately HKD149 million (US$19 million) during the interim period, according to Tuesday’s filing.
Far East’s interim group-wide revenue was HKD2.97 billion, and the net profit attributable to shareholders of the firm was HKD616 million.
The firm announced earlier this year that it had completed in late April a merger deal that allowed it to acquire a firm – the Nevada-incorporated Trans World Corporation (TWC), which owns gaming business in the Czech Republic. Trans World also has hospitality business in that country, in Germany and in Austria.
Trans World owns and operates three casinos in the Czech Republic under the “American Chance Casinos” brand. The have an aggregate of 59 gaming tables and 508 slot machines. The venues are on the Czech Republic’s respective borders with Germany and Austria.
Those venues generated for Far East a total of HKD114.21 million in gaming revenue, mostly derived from slots. Profit from gaming operations at those casinos was HKD50.36 million during the period, the filing noted.
“With the group’s implementation of the ‘Asian Wallet’ strategy, the group will endeavour to introduce Asian customers to Trans World Corp’s properties to supplement the group’s hospitality offerings geographically,” Far East Consortium said in the filing. The American Chance casinos had, in the interim period, catered for “cross-border guests” from Germany and Austria, the Hong Kong-listed firm said.
Far East also saw a profit of nearly HKD34.64 million from its gaming interests in Australia, with the money mostly in the form of a dividend from its equity investment in The Star Entertainment.
Far East and Hong Kong’s privately-held Chow Tai Fook Group had, in March, announced a “strategic alliance” with The Star Entertainment. Under it, each Hong Kong entity took a 4.99 percent stake in the casino company. The Star Entertainment had said the aggregate consideration involved was AUD490 million (US$375.5 million).
Far East stood to benefit from cash flow from The Star Ent’s dividend distribution based on a dividend payout of “at least 70 percent” of normalised net profit after tax, the Australian firm had said in a filing at the time.
Far East has said its investment in The Star Ent and in the Brisbane casino project would be a “major growth driver” for it. Far East said in its interim results filing that its equity investment amount in that segment was more than AUD200 million.
“Payments will be made progressively commencing from signing of the Queen’s Wharf Brisbane (QWB) project documents up to completion of the QWB project which is expected by the end of the financial year 2023,” Far East noted in the filing. The Brisbane venture envisages three residential towers, five hotels, food and commercial outlets as well as a casino in the Brisbane waterfront district.
“Together with the group’s portion of land premium for this residential component [of QWB], the total capital commitment of the group is expected to be approximately AUD300 million which the group intends to fund from its internal resources,” Far East stated. “… The QWB Project is expected to contribute significantly to the group’s recurring cash flow stream as well as to add to its residential development pipeline,” it added.
Far East has also an extended partnership with Chow Tai Fook and The Star Ent in other mix-use property developments on Queensland’s Gold Coast and also in Sydney, New South Wales.
In Sydney, the three companies are working on a new development that will sit within the boundaries of The Star Sydney casino and entertainment precinct, which includes the new Sydney International Convention Centre, Darling Harbour, Sydney Fish Market and The Bays Precinct. The development will have 220 six-star hotel rooms and 200 private apartments housed in a 61-storey tower, according to previous filings from The Star Ent.
The Sydney venture is currently at the “planning stage”, Far East said in its interim results filing.
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