GGRAsia – Summit Ascent flags 1H revenue up 37pct, return to profit

Summit Ascent flags 1H revenue up 37pct, return to profit

Aug 15, 2022 Newsdesk Latest News, Rest of Asia, Top of the deck

Summit Ascent Holdings Ltd, a Hong Kong-listed investor in the Tigre de Cristal casino resort (pictured in a file photo) near the Russian Pacific port of Vladivostok, says it expects to record a year-on-year increase in revenue, of “approximately 37 percent”, for the first half of 2022. It adds that will help it to return to profit, as compared to a loss of HKD8 million (US$1.0 million) for the first six months of 2021.

The firm expects profit for the six-month period ended June 30 to be “not less than approximately HKD123 million”.

Summit Ascent made the announcement in a filing to the Hong Kong Stock Exchange on Friday. It added it planned to release its interim results for the first half of 2022 on August 23.

The company is a subsidiary of Hong Kong-listed casino investor Suncity Group Holdings Ltd.

Summit Ascent stated it expected to record adjusted earnings before interest, taxation, depreciation, and amortisation (EBITDA) of HKD60 million for the first half of 2022. The firm had recorded adjusted EBITDA of HKD17 million in the prior-year period.

“In addition to the positive cash flows generated from operating activities, the expected profit is mainly derived from the net exchange gain of approximately HKD157 million due to the unanticipated appreciation of the Russian rouble for the six-month period ended June 30, 2022,” Summit Ascent said.

It added that positive performance had been “partially offset” by fair value losses on the group’s derivative financial instruments, of approximately HKD75 million, and a loss on derecognition of the group’s financial assets, of HKD36 million.

In its latest filing, Summit Ascent made a reference to the potential effect in its operations from the invasion of Ukraine by Russia. The company said that the Tigre de Cristal casino resort had been “self-sustaining without any bank borrowings” but the firm warned that “the Western sanctions resulting from the Russia-Ukraine conflict may cause significant long-term damage to the Russian economy and its tourism industry”.

Summit Ascent added: “The board has been closely monitoring the market conditions, including a possible geopolitical realignment, supply disruptions, and food and energy insecurity, and will continue to assess the impact [of the the Russia-Ukraine conflict] on the financial position and operations of the group and make further announcements if and when necessary or required.”

Andrew Lo Kai Bong, a senior executive at Suncity Group Holdings, acquired in May controlling shares in that firm. The acquisition resulted in him gaining a controlling interest in Summit Ascent.

Suncity Group Holdings – and Summit Ascent – were previously controlled by Alvin Chau Cheok Wa, the boss of Macau-based, privately-owned junket brand Suncity Group.

Mr Chau resigned as the chairman and an executive director of Suncity Group Holdings with effect from December last year. That followed his pre-trial detention in Macau under suspicion of membership of a criminal group, of organising illegal gambling for Chinese customers, and of money laundering.

Mr Chau – and other defendants linked to the now-defunct Macau casino junket Suncity Group – are due to go on trial in Macau starting on September 2. That is according to the schedule published on the website of Macau’s Court of First Instance.