Hong Kong-listed casino investor Landing International Development Ltd saw its annual loss widen on higher turnover.
Its loss was approximately HKD987.97 million (US$127.4 million) for the 12 months to December 31, on turnover that rose 10.4 percent year-on-year to HKD246.50 million, the firm said in a filing to the Hong Kong Stock Exchange on Friday.
It said reasons for the widening annual loss included: “an increase in administrative expenses incurred in the construction and planning stages of an integrated resort development and property development in South Korea”; an increase in provision for impairment of assets and other receivables; and loss on disposal of subsidiaries engaged in property development business in mainland China.
The new resort mentioned in Friday’s filing is a project on South Korea’s semi-autonomous island of Jeju. The island already has a number of small casino resorts – one of which has been fully owned by Landing International since October – and has become a popular holiday destination for mainland Chinese tourists. They are allowed visa-free entry for up to 30 days if they fly or sail there directly.
Landing International’s new Jeju project is currently referred to as the “Myths and History Park”. It is a joint venture with a unit of Singapore casino operator Genting Singapore Plc and is due to open progressively from 2017, according to Friday’s filing. The entire development is expected to be completed by 2019 added the document.
“The project has achieved satisfactory progress in construction since its ground breaking in February 2015, with the completion of capping in partial residential projects and pre-sale of said accommodations commencing in the second quarter of 2016,” stated Landing International. At the time of the ground breaking, the project was being referred to as Resorts World Jeju.
Referring to plans for gaming at the venue, Landing International said on Friday: “The group believes nowadays tourists are no longer satisfied with simple and traditional gaming services. Instead, they are progressively turning towards pursuing an experience that combines shopping, dining, gaming and business that can only be provided by a world-class integrated entertainment resort.”
The current budget for the new resort was not mentioned in the latest filing. In June 2014, Landing International had mentioned it might spend – with partners – a total of US$2.2 billion. In February last year it was described as a US$1.8-billion scheme.
On July 17, Landing International announced the results of a rights subscription offer, with funds raised being directed toward its portion of the capital costs for the new Jeju casino project. It said that the exercise raised HKD4.16 billion.
Friday’s annual results filing by Landing International confirmed that since October 19 an existing casino hotel on Jeju Island in South Korea – in which Landing International had earlier taken a stake – had become solely owned and operated by the company under the brand name Landing Casino. It had previously been known as Hyatt Regency Jeju Hotel.
Operations at the existing Jeju casino hotel were suspended for renovation work between October 2014 and January 2015.
“Upon the completion of the Jeju casino acquisition, intangible asset of approximately HKD816.50 million, representing the fair value of the relevant casino license, and goodwill of approximately HK$5.44 million… resulted,” said Friday’s filing.
The document added that for the year ended December 31, Landing International made provision for impairment of trade receivables amounting to approximately HKD5.46 million and provision for impairment of other receivables amounting on a net basis to approximately HKD209.55 million, compared to HKD3.23-million worth of the latter type of receivables in 2014.
The filing also said that a conditional deal worth GBP137 million (US$197.6 million) struck in December for Landing International to acquire all the shares in a company controlling Les Ambassadeurs Club and Casino – an upmarket gaming venue in London in the United Kingdom – had still to be confirmed by Landing International’s shareholders.
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Professor emeritus at Whittier Law School in California, in the United States, and a visiting professor at University of Macau