GGRAsia – US$4.5mln exchange loss at Summit as Russian ruble sinks

US$4.5mln exchange loss at Summit as Russian ruble sinks

Aug 15, 2023 Newsdesk Latest News, Rest of Asia, Top of the deck

Hong Kong-listed Summit Ascent Holdings Ltd, an investor in the Tigre de Cristal casino resort, near the Russian Pacific port of Vladivostok, says it expects to post a loss of HKD16.1 million (US$2.1 million) for the six-month period ended June 30. That compares with a profit of HKD85.2 million for the corresponding period in 2022.

The firm said in a filing on Monday to the Hong Kong Stock Exchange that the anticipated loss for the first half this year was “mainly due to the recognition of exchange losses of approximately HKD35.2 million [circa US$4.5 million] caused by the fluctuation of the Russian ruble exchange rate”.

The Russian currency fell to its lowest level in 16 months against the U.S. dollar on Monday. Summit Ascent reports its results in Hong Kong dollars, a currency pegged to the U.S. dollar.

According to reports in specialist financial media, the Russian ruble is one of the worst-performing currencies of 2023. It has lost around 30 percent of its value against the U.S. dollar since January, as Russia faces a decline in export revenues, coupled with an increase in imports and higher military spending, linked to the war on Ukraine.

Summit Ascent added that it had recognised exchange gains of approximately HKD157.1 million for the first six months of 2022.

The group’s unaudited condensed consolidated financial results for the six-month period ended June 30 are expected to be announced late this month, the company said.

Tigre de Cristal was the first venue to open in the Primorye gambling zone, in the Russian Far East, in 2015. It is majority owned by Summit Ascent, controlled by Hong Kong-listed firm LET Group Holdings Ltd. The Shambala casino resort, run by a firm called Shambala CJSC, was the second casino to launch in Primorye, in 2020.

An entity called Asia Invest Group LLC is expected to start in September construction of a casino resort in Primorye, GGRAsia reported in July.

Hong Kong-listed NagaCorp Ltd said in March last year it would “suspend the development” of its gaming resort at Primorye, citing “uncertainties” around the project. At that time, the firm did not mention either the Ukraine crisis or international sanctions on Russia, although that those things were alluded to by investment analysts.