GGRAsia – Paradise Ent narrows 2021 loss, concerned about satellites

Paradise Ent narrows 2021 loss, concerned about satellites

Mar 25, 2022 Newsdesk Latest News, Macau, Top of the deck

Casino games maker and casino management firm Paradise Entertainment Ltd reported a nearly HKD88.4-million (US$11.3-million) net loss – including the interests of non-controlling shareholders – for full-year 2021, compared to a HKD192.1-million loss in the prior year, it said in a Thursday filing to the Hong Kong Stock Exchange.

Group-wide revenue for the period rose by 40.5 percent year-on-year, to HKD494.1 million in 2020.

The group’s adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) were negative to the tune of HKD18.4 million in full-year 2021, an improvement from a negative performance of HKD101.1 million in the previous year.

The Hong Kong-listed firm controls LT Game Ltd, a brand that provides electronic gaming equipment and management technology for casinos. It also runs casino operations at Casino Kam Pek Paradise (pictured in a file photo), a so-called satellite casino under the licence of Macau concessionaire SJM Holdings Ltd.

The increase in revenue in 2021 “was mainly attributable to the increase in revenue from the provision of casino management services in Macau and the sale/leasing of electronic gaming equipment and systems in both Macau and overseas markets,” said the company in a separate press release.

Total GGR generated by Casino Kam Pek Paradise in 2021 amounted to HKD761.7 million, up 36.8 percent year-on-year. Adjusted EBITDA from the casino for the period was HKD42.3 million, as compared with a loss of HKD60.5 million in 2020.

Paradise Entertainment saw its full-year 2021 revenue from the electronic gaming equipment and systems segment rise 209.9 percent year-on-year, to HKD78.4 million. Such result comprised mainly revenue derived from the sale of 116 live multi game (LMG) terminals and the provision of upgrading services to 1,607 LMG terminals in Macau, and the sale of 99 slot machines in overseas markets, stated the company.

Nonetheless, the segment recorded an adjusted EBITDA loss of HKD21.2 million, as compared with a loss of HKD71.6 million in 2020.

The release from Paradise Entertainment quoted Jay Chun, the firm’s chairman and managing director, as saying that 2021 was a “tough and challenging year”, because of the impact from the Covid-19 pandemic.

“We expect to see further room for the growth on the LMG machines [in the Macau market] due to the cost efficiencies in that they reduce labour costs for operators, while still providing the thrill of the live table for the players,” he added.

Concern over satellite casinos

Paradise Entertainment’s chairman also said the new regulatory requirements mulled for Macau satellite casino operators – as mentioned in the draft of the city’s gaming law amendment bill – “if adopted and enacted, will significantly affect the operation of satellite casinos”.

“The group, being the service provider of Casino Kam Pek Paradise, shall be affected by the enactment of the draft bill,” he added. “The group is still waiting for further details of relevant provisions of the draft bill to be announced and confirmed and will assess its impact on the group’s operations.”

On Thursday, Chinese-language media outlet Macao Daily News reported that at least “seven” Macau satellite casinos – nearly 40 percent of such properties currently active in the local market – might withdraw from the sector by mid-year. It cited industry sources it did not identify, and it also did not name the venues.

Mr Chun said in his prepared remarks: “The group has a strong will of continuing to provide efficient casino management services and will stay attentive to the development and identification of cooperation opportunities in order to contribute to the Macau gaming industry within the ambit of the new laws.”