Junket Suncity confirms 4-month loss, reassures investors
Suncity Group, usually regarded by investment analysts as the largest-single Macau junket operator by rolling chip volume, said in a Tuesday statement it had recorded a loss from February to May this year.
The statement issued in the name of Alvin Chau Cheok Wa, the boss of privately-held Suncity Group, noted that due to the “immense impact” of the Covid-19 pandemic on Macau, the group’s “shareholders will be exempted from the loss recorded from February to May 2020, and normal calculations will be resumed in the month of June, except for shareholders whose shares are withdrawn.”
The VIP junket brand confirmed separately to GGRAsia by email that the reference to “shareholders” meant “passive investors who do not participate in the day-to-day decisions of operating the company”. It was not clear from the response if these investors played any role in the provision of operating capital to the junket investor.
A Monday note from brokerage Sanford C. Bernstein Ltd had said that market-wide in Macau for the seven days from May 18 to May 24, the average daily rate of casino gross gaming revenue (GGR) actually fell into negative territory judged year-on-year, influenced by the small base of players during the Covid-19 pandemic and hold volatility.
Suncity said additionally on Tuesday that it would use its fiscal reserve to make up for any shortfall in its accounts, as well as to pay the full salary amounts of what it said totalled 4,500 employees; as well as “rebates” for account deposits – from now until January 2021 if necessary. That was in order to “enhance shareholders’ confidence in the group’s future prospect,” it said.
“Starting from the month of June, the full amount of employees’ salary as well as rebates for account deposit will also be paid using our fiscal reserve up to 2020 fourth quarter or January 2021 depending on how the market is recovering,” noted Suncity on Tuesday.
The statement added: “The original scheme of dividend calculation will be resumed when the pandemic is brought under control and business is back on track, bringing profits to our shareholders.”
Mr Chau noted the moves were “not an easy decision for both myself and Suncity Group and I urge you, my fellow shareholders, to continue to stand together with the group,” in pursuit of the “long-term goal of prosperity”.
A Suncity spokesperson explained to GGRAsia that fiscal reserve meant “the accumulated earnings” of the group. But the person added: “Due to commercial confidentiality reasons … we could not reveal the amount.”
Macau has not had a Covid-19 case since early April. All 45 confirmed patients have been released from hospital care, and the city recorded no death from the disease.
But travel between Macau and Hong Kong is still subject ordinarily to a 14-day quarantine period in each direction. Mainlanders entering Macau have no quarantine restrictions, but those wishing to return to the mainland after a visit to Macau are currently are subject to a 14-day quarantine requirement. The mainland and Hong Kong are usually key markets for supplying gamblers for Macau casinos. Travel conditions imposed since the advent of the Covid-19 pandemic have coincided with a slump in the volume of tourists and casino gamblers coming to Macau.
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