Nasdaq-listed Macau VIP gambling room investor Iao Kun Group Holding Co Ltd on Wednesday reported a full year 2014 loss on net income, largely on a change in fair value on three high roller rooms acquired during the period.
For the whole of 2014, Iao Kun had a net loss of US$60.1 million, (a negative of US$0.99 per share basic and diluted), compared to net income of US$5.4 million, (or US$0.10 per share fully diluted), for 2013.
The 2014 full year net income result included a US$60.9 million change in fair value of three recently acquired Macau VIP rooms – King’s Gaming, Bao Li Gaming and Oriental.
But the firm said its trading position improved in the fourth quarter. Iao Kun’s net income for the three months to December 31 actually rose year-on-year to US$5.7 million, (or US$0.09 per share fully diluted), compared to a net loss of US$5.5 million, (a negative of US$0.09 per share, basic and diluted), for the same period of 2013.
“The increase in net income for the three months ended December 31, 2014 was primarily due to increased revenue, [and] a net decrease to the contingent consideration liability for Bao Li Gaming and the Oriental VIP Room, due primarily to lower share prices, and lower [junket] commissions as a result of lower rolling chip turnover, partially offset by higher commission rates offered to non-credit agents,” said the firm in a statement.
The firm’s rolling chip turnover for the year ended December 31 was US$16.6 billion, a decrease of 2 percent compared to the US$17.0 billion recorded for 2013.
In a commentary on the business outlook for 2015, Iao Kun said that in January and February, rolling chip turnover was US$1.44 billion (an average of US$720 million per month), down 52 percent year-on-year, compared to US$3.02 billion (an average of US$1.51 billion per month) for the first two months of 2014.
The company estimates rolling chip turnover for its five existing VIP rooms in Macau for calendar year 2015 will be between US$8.5 billion and US$10.0 billion.
In February 2015, the Hong Kong Stock Exchange said it was unable to proceed with a review of the company’s application to list its shares in Hong Kong by way of introduction. “The company has elected to not continue with the application process at this time,” confirmed Iao Kun in its 2014 earnings statement.
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