Hong Kong-listed casino equipment maker and casino venue manager Paradise Entertainment Ltd on Tuesday posted a net loss of HKD40.2 million (US$5.1 million) for the first half of 2017, down 90.2 percent compared to a net loss of HKD416.8 million a year earlier.
The company said the decrease in loss was mainly because the prior-year period “included a one-off non-cash loss” worth HKD334.8 million related to the grant of some exclusive rights to global gaming equipment supplier International Game Technology Plc (IGT).
Paradise Entertainment in April last year agreed to transfer all of its electronic table game technology, patents and other intellectual property to IGT, with the exception of table game intellectual property used exclusively in Macau.
Paradise Entertainment posted the improved result for the first half of 2017 despite a 5.9-percent year-on-year fall in revenue, to HKD489.3 million. “The decrease was partly due to the change of the contractual arrangement of the Casino Macau Jockey Club from provision of casino management services to revenue sharing from Live Multi Game (LMG) terminals since 1 January 2017,” the firm said in a filing to the Hong Kong Stock Exchange.
Paradise Entertainment develops, supplies and sells electronic gaming systems in Macau and internationally under the LT Game brand. The company also provides casino management services in Macau under service agreements with two existing Macau operators.
The company used to run the former Casino Jockey Club – under SJM Holdings Ltd’s licence – before the relocation of the gaming venue in June to the new Macau Roosevelt Hotel.
Paradise Entertainment currently manages casino gaming at Casino Kam Pek Paradise (pictured), under the SJM Holdings gaming licence. It also manages casino operations at Casino Waldo, under a Galaxy Entertainment Group Ltd licence.
Paradise Entertainment said the casino management services segment recorded revenue of HKD399.1 million in the six months to June 30, representing a decline of nearly 0.9 percent from the prior-year period. “Our casino management services performance has been progressively stabilising due to a recovery [in the Macau] market,” said the company.
Revenue generated by the sale and leasing of electronic gaming equipment and systems stood at HKD90.2 million, down approximately 23 percent from a year earlier.
Paradise Entertainment reported adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) of HKD0.9 million for the first six months of 2017, compared to an EBITDA loss of HKD1.4 million in the prior-year period. “The turnaround was mainly due to streamlining costs across casinos under management for the six months ended 30 June 2017,” the firm said.
Paradise Entertainment said it “retains a positive view on the Macau gaming industry,” adding that it would “continue to look for potential opportunities in Macau and elsewhere” to expand its business.
The company announced in late June a deal to acquire the Lan Kwai Fong casino hotel in Macau for a total purchase price of HKD2.38 billion. The firm’s chairman and managing director Jay Chun told GGRAsia last month that his company hopes to start operating the downtown Macau property by the end of this year.
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”We have not had discussions about the concession renewal with the [Macau] government. We have taken the view that if we continue to deliver on what we expect is the expectations from operators, then we will be treated fairly”
Chairman and chief executive of MGM Resorts, the parent of Macau casino operator MGM China