GGRAsia – Shin Hwa World Ltd cuts 1H loss, debt maturity looms

Shin Hwa World Ltd cuts 1H loss, debt maturity looms

Aug 29, 2024 Newsdesk Latest News, Rest of Asia, Top of the deck

Hong Kong-listed of Shin Hwa World Ltd, promoter of Jeju Shinhwa World, a resort with foreigner-only casino on the South Korean holiday island of Jeju, narrowed its interim loss by nearly one-third judged year-on-year.

Such loss was just over HKD231.5 million (US$29.7 million) in the first half of 2024, versus a loss of HKD338.9 million a year earlier.

The firm said the reason for the improvement was “mainly attributable to the increase in consolidated revenue generated from the gaming business and property development segments”.

Other factors in the better first-half 2024 trading performance, said the group, were “decrease in amortisation and depreciation; and the decrease in finance cost”. The board resolved not to declare the payment of an interim dividend for the six months.

The group’s consolidated first-half revenue rose 25.5 percent year-on-year, to HKD524.7 million.

Non-gaming revenue performance hugely outstripped that of the gaming segment, though gaming revenue grew at a faster pace. Non-gaming revenue for the first six months was just under HKD409.9 million, up 3.9 percent year-on-year.

Gaming revenue rose 382.6 percent from first-half 2023, to nearly HKD114.9 million. The gaming operation recorded a segmental loss of HKD55.8 million, an improvement on the HKD107.8-million loss recorded a year earlier.

Coinciding with the first-half improvement in the volume of the gaming business, trade receivables involving casino players leapt from the HKD837,000 as of December 31, to nearly HKD26.5 million.

The group had net current liabilities of nearly HKD910.3 million as of June 30. As of June 30, Shin Hwa World Ltd’s balance of bank borrowings was nearly HKD1.36 billion, which the firm said “will expire within one year”.

Wednesday’s results filing said that the directors believed the company would have sufficient working capital to finance its operations and to meet its financial obligations as and when they fall due, “in the foreseeable future”.

This was based on the cash flow projections of the group and “after taking into consideration that the group is in advanced discussion with several financial institutions to refinance the bank borrowing that will expire in June 2025”.

In July, outside the reporting period, former chairman and executive director of Shin Hwa World Ltd, Yang Zhihui, relinquished the status of being its largest substantial shareholder, following the group’s completion of a rights issue.