Hong Kong-listed gaming investor Imperial Pacific International Holdings Ltd on Friday announced it plans to open more VIP gaming rooms by the end of 2017 at its casino project on the Pacific island of Saipan.
Imperial Pacific has the right to an exclusive casino licence on Saipan, the main island of the Commonwealth of the Northern Mariana Islands (CNMI), a United States jurisdiction. The company began on July 6 gaming operations at its Imperial Pacific Resort (pictured). Previously it had been running an interim facility called Best Sunshine Live.
“With the gaming capacity to be further enhanced, we expect to commence collaboration with gaming promoters after they are granted junket operator licences… on the Island of Saipan,” the firm stated in its unaudited interim report for the six months to June 30.
“Due to CNMI’s low tax regime, we believe we will be able to offer very competitive commission rates to our gaming promoters,” it added.
For the first half of 2017, Imperial Pacific posted a net profit of HKD912.0 million (US$116.6 million), up 8.9 percent from the prior-year period. The company reported adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) of HKD1.62 billion, up 26.2 percent from a year earlier.
Gross revenue for the period increased by 83.1 percent year-on-year to HKD7.30 billion, principally contributed by the casino gaming operations, said Imperial Pacific. The company reported gross gaming revenue (GGR) of HKD7.27 billion for the first six months of 2017, compared to HKD3.97 billion a year earlier.
The firm said its casino continued to achieve “significant monthly VIP table games rolling and growth of revenue”. During the six months to June 30, unaudited VIP table games rolling stood at approximately HKD196.3 billion, up 55.4 percent compared to a year earlier.
Higher commissions
VIP GGR for the first half of 2017 was HKD7.09 billion, with a win percentage of 3.61 percent, said the company. “Our VIP customers primarily consist of credit players. Geographically, most of our direct VIP patrons are from China, Hong Kong, Macau, [South] Korea and Saipan,” the firm noted.
Imperial Pacific added: “A significant portion of our VIP casino customers is sourced through the group’s own marketing avenues. Such high-spending VIP players generally receive commission and allowances based on a percentage of the rolling chip turnover.”
The firm paid commissions of HKD2.54 billion during the reporting period, an increase of 87.6 percent from a year earlier.
The company additionally said its operating expenses increased by 207.7 percent year-on-year, to HKD2.92 billion.
“The increase is mainly attributable to the increase in impairment of trade receivables in accordance with the group’s normal provision of bad debt policy and management’s consideration of individually impaired trade receivables which are unlikely to be recovered,” said Imperial Pacific. The firm reported impairment of trade receivables of HKD2.08 billion.
Imperial Pacific said earlier this month that it was seeking to raise an aggregate of HKD400 million from two bond placements “for the development of phase one of the Saipan project”. The company had said it aims to complete next year the construction of the first guest accommodation at Imperial Pacific Resort. Once finished, the hotel would offer 329 suites and 15 villas.
In the latest interim report, Imperial Pacific said its board acknowledged “certain delay in construction mainly due to labour issue caused by the main contractor and several subcontractors and to a lesser extent unfavourable weather conditions”. The company added: “However, with the construction work already back on track, the board believes that the issue will soon be resolved and cease hindering the progress of the project.”
