Mar 30, 2016 Newsdesk Latest News, Macau, Top of the deck
Hong Kong-listed China Star Entertainment Ltd, owner and operator of casino hotel Lan Kwai Fong (pictured) in downtown Macau, saw its net profit decrease by 49 percent year-on-year to HKD107.9 million (US$13.9 million) in 2015.
Such decrease was mainly attributable to a “significant decrease in revenue from service income from gaming operations as a result of the recession in [the] gaming industry in Macau,” the firm said in a filing on Tuesday. The decline in profit was also attributed to share-based payment expenses of HKD52 million related to share options granted in the 2015 financial year, the company added.
China Star runs Lan Kwai Fong’s casino under a gaming licence from SJM Holdings Ltd. Casino Lan Kwai Fong operated a total of 84 gaming tables and 70 slot machines as of the end of last year.
China Star reported total revenue of HKD1.04 billion for the year ended December 31, down 19 percent from the previous year. Operating profit for the period decreased by 40 percent year-on-year to HKD136.9 million.
The firm has five reportable segments: hotel and gaming services; gaming promotion operations; film related operations; property development; and sales of pharmaceutical and health products.
The firm reported revenue for the hotel and gaming segment of HKD877.9 million in 2015, a decline of 25 percent from the prior year. Such revenue accounted for 84 percent of the group’s total revenue for the year.
Gaming revenue stood at HKD724.6 million in 2015, with China Star reporting declines in all segments. Service income received from VIP gaming operations decreased 61 percent year-on-year to HKD32.6 million, while that of mass-market tables was down 25 percent, to HKD684.7 million. The company recorded service income from slot machine operations of HKD7.3 million, down 54 percent from the prior year.
Market wide casino gross gaming revenue in Macau declined 34.3 percent in 2015 compared to the previous year, according to official data.
In Tuesday’s filing, China Star said it was able to respond “efficiently to the changing market conditions” in Macau’s gaming industry, strengthening its performance in the mass-market segment. “We have implemented more stringent cost control measures on operation expenses and marketing expenses,” it added.
China Star’s gaming promotion operations – comprised of investments in profit streams of junket operators – recorded revenue of HKD4.7 million for 2015. The company reported a profit of HKD2.9 million for this segment, compared to a loss of HKD9.6 million in 2014.
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