Neptune Group Ltd, an investor in casino VIP promoters in Macau, reported net profit of HKD148.8 million (US$19.2 million) for the year ended June 30, 2014. That’s down 93.8 percent from a year earlier, the Hong Kong-listed company said in a filing on Friday.
The firm said the significant drop was caused by an “impairment loss of available-for-sale investments of HKD111.1 million” caused by the recent slowdown in Macau’s gaming market. That led to a drop in value of an investment made in October 2013 in the profit stream of a junket operator in Galaxy Macau casino.
The same reasons required the company to write down HKD88.6 million from an investment made in February 2014 in the profit stream of a junket operator in City of Dreams casino, it added.
The firm recorded a 23 percent rise year-on-year in turnover to HKD710.4 million, but it saw its earnings before interest, taxation, depreciation and amortisation (EBITDA) slide 8.7 percent to HKD517.6 million.
Neptune said it has investments in junkets that operate VIP rooms in six casinos in Macau, with a total of 89 gaming tables.
“The entire Macau gaming market was slightly affected by the impact of [the] soft landing of [the] Chinese economy in the first half of 2014,” the company said in the filing.
The firm however still believes that it will continue to benefit from its investments in Macau’s VIP junket business. “We are cautiously optimistic about the VIP room business [in Macau],” it said.
Neptune added it would continue to develop its presence in Macau and beyond to diversify its sources of revenue.
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Vitaly Umansky, Louis Li and Shirley Yang
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