Hong Kong-listed casino equipment maker and gaming services provider Paradise Entertainment Ltd has warned it expects to make a loss for full-year 2015.
It said in a filing on Thursday the likely loss, based on its so far unaudited accounts, was mainly due to: “a decrease in gross gaming revenue of the group’s casino management business; and an increase in overall operating expenses, particularly on labour costs”.
Besides making electronic gaming machines under the branding of its unit LT Game Ltd, and supplying them to casinos, Paradise Entertainment 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, 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.
Paradise Entertainment’s 2014 profit was HKD66.54 million (US$8.6 million), a decline of 35.9 percent on the HKD103.78 million achieved in 2013.
In first half 2015, the group posted a HKD23.9-million net loss.
Paradise Entertainment added in its full-year 2015 profit warning: “Notwithstanding the expected loss to be recorded for the year ending December 31, 2015, the group remains confident in its current business strategies.”
The firm added it would “optimise its cost structure to remain lean in the current weak operating environment in Macau.”
As of November, the firm said it had 3,723 units of its Live Multi Game product installed in 18 casinos in Macau, including 1,700 units at the gaming venues where it provides management services. It said it also had 200 Live Multi Game units deployed in casinos outside Macau.
The firm noted in its Thursday filing that it “expected to ramp up its overseas gaming system market with machine installations in 2016”.
During this year’s Macao Gaming Show – a casino industry trade show held in Macau in November – Jay Chun, chairman of Paradise Entertainment, said the firm had made a “breakthrough” overseas in 2015, “especially in the U.S. market”.
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Analyst at Roth Capital Partners