GGRAsia – Junket investor Iao Kun 1Q revenue down 48 pct

Junket investor Iao Kun 1Q revenue down 48 pct

Jul 03, 2015 Newsdesk Latest News, Macau, Top of the deck, World

Nasdaq-listed casino junket investor Iao Kun Group Holding Co Ltd said its rolling chip turnover for the three months to March 31 was US$2.2 billion, a decrease of 54 percent, compared to US$4.8 billion in the prior-year period.

Revenue for the first quarter fell 48 percent year-on-year to US$41.7 million, Iao Kun said in a filing.

The firm cited “a decreasing trend of VIP baccarat, consistent with the overall decline of gaming revenue in Macau” – where it had interests in five VIP rooms during the reporting period – and “the economic downturn and the on-going anti-corruption campaign in mainland China”, as reasons for the revenue decline.

But net income for the first quarter rose to US$17.1 million, or US$0.28 per share (basic and diluted), compared to net income of US$3.2 million, or US$0.05 per share (basic and diluted), for the same period of 2014. The quarterly net income included a change in fair value of US$13.1 million related to the acquisition of two Macau VIP rooms – Bao Li Gaming and Oriental VIP Room.

Outside the reporting period, in May 2015, it was announced that Iao Kun had completed the acquisition of profit interests in junket operator arrangements at the Crown Perth Casino and the Crown Melbourne Casino – two Australian venues operated by Crown Resorts Ltd.

Commenting on the Australia deals, Lam Man Pou, chairman of Iao Kun, said in the earnings statement: “This is our first step in expanding overseas and we remain committed to finding additional opportunities to further expand our presence and ultimately generating long-term value for our shareholders.”

The firm said it was adjusting downward its guidance on likely rolling chip turnover for 2015 for its five existing VIP rooms in Macau by between 15 percent and 18 percent. The new guidance is for rolling turnover of US$7 billion to US$8.5 billion, compared to US$8.5 billion and US$10 billion estimated previously.