GGRAsia – Paradise Ent swings into red on lower gaming revenue

Paradise Ent swings into red on lower gaming revenue

Mar 31, 2016 Newsdesk Latest News, Macau, Top of the deck

Casino equipment maker and gaming services provider Paradise Entertainment Ltd on Wednesday posted a net loss attributable to shareholders of HKD165.2 million (US$21.3 million) for 2015, compared to a profit of HKD58.4 million in the prior year.

The Hong Kong-listed company reported total revenue of HKD1.19 billion for the year, down 8.4 percent compared to 2014. Adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) decreased by 76.3 percent year-on-year to HKD48.2 million.

Paradise Entertainment develops, supplies and sells electronic gaming systems in Macau and internationally under the LT Game brand.

The firm also has contracts to provide some gaming management services at four Macau gaming venues. They are: Casino Kam Pek Paradise – an SJM Holdings Ltd-licensed electronic games-only casino in downtown Macau; Casino Waldo (pictured), operating under the Galaxy Entertainment Group Ltd licence; Casino Macau Jockey Club – a venue operating under SJM Holdings’ licence; and an electronic gaming hall at Casino Lisboa, a property directly managed by SJM Holdings.

In Wednesday’s filing, Paradise Entertainment attributed the 2015 loss to a decrease in gross gaming revenue (GGR) in the casino management business and a surge in overall operating expenses, particularly labour costs.

Market wide casino GGR in Macau declined 34.3 percent in 2015 compared to the previous year, according to official data.

Paradise Entertainment also recorded an impairment loss on intangible assets of nearly HKD67.3 million in respect of patent applications in the United States. It said sales of Live Multi Game (LMG) terminals in the state of Nevada had to be postponed because approvals from the Nevada Gaming Board were only obtained at the end of 2015.

For full year 2015, the firm’s casino services segment recorded revenue of approximately HKD891.1 million, down 13.7 percent from the previous year. Such revenue accounted for 81.6 percent of the company’s total revenue for the period. The casino services segment reported a loss of about HKD81 million in 2015.

Revenue from the provision of gaming systems increased by 25.6 percent year-on-year to HKD201 million in the year ended December 31, 2015. The segment nonetheless reported a loss of HKD30.3 million for the period.

Paradise Entertainment said in Wednesday’s filing that it remains confident in its current business strategies despite the loss recorded in 2015.

“The group will optimise its cost structure to remain lean in the current weak operating environment in Macau. The group is also expected to develop its overseas gaming system market with more machine installations in 2016,” it stated.