GGRAsia – South Shore posts US$748mln annual loss on impairments

South Shore posts US$748mln annual loss on impairments

Jul 18, 2019 Newsdesk Latest News, Macau, Top of the deck

South Shore Holdings Ltd, the developer of The 13 Hotel (pictured), a Macau facility that aspires to have a casino, reported a net loss of HKD5.85 billion (US$748.4 million) for its fiscal year ended March 31, 2019.

That compares with a net loss of HKD1.57 billion a year before, the company said in its unaudited results filed on Wednesday with the Hong Kong Stock Exchange.

The company reported in its financial statements for the year an aggregate impairment of approximately HKD4.70 billion on the carrying amount of assets under the hotel segment. It included an impairment of nearly HKD3.40 billion on its hotel property, and approximately HKD1.04 billion on prepaid land lease payments.

The company had warned of the impairment earlier this month, saying it was a non-cash accounting issue and had no effect on the firm’s cash flows.

South Shore reported aggregate revenue of slightly above HKD9.38 billion, up 38 percent from the previous year. The majority of the firm’s revenue came from the group’s construction business.

The Hong Kong-listed company reported revenue of HKD4.47 million from its hotel, food and beverage segment. Cost of sales in that segment however reached HKD504.5 million, said the firm.

Trading in South Shore shares has been suspended since July 2. Trading will remain suspended until further notice, according to previous filings. South Shore promotes The 13 Hotel in Macau, which opened in August 2018.

The company has said it intends to put a casino in the hotel, but the Macau government has previously said it has not received a request for permission to do that. Such use would require access to the gaming licence of one of Macau’s current six operators.

In June South Shore announced that, with a view to reducing its debt, it had sold for HKD24 million, 24 Rolls-Royce cars which had been bought to carry well-heeled customers of The 13 Hotel.

The board of South Shore said in January it had signed a US$191-million memorandum of understanding aiming to reduce debt. The company has flagged in a number of occasions “material uncertainty” on the group’s ability to continue operations as its losses mount.