Profit at Macau casino hotel operator Emperor Entertainment Hotel Ltd fell 49.2 percent year-on-year in the 12 months to March 31, the firm said in a filing to the Hong Kong Stock Exchange on Wednesday.
Such profit was HKD256.2 million (US$33 million) compared to HKD504.3 million in the previous year.
The group runs the 307-room Grand Emperor Hotel (pictured) in downtown Macau. As of the end of the reporting period, the property’s casino – operating under the SJM Holdings Ltd gaming licence – had 67 mass-market tables; 188 slot machine seats; and a self-managed VIP gaming room with 10 tables. Table count remained the same as in the prior-year period, but slot machine seats were down by 12 in the reporting period.
The group also operates a Macau hotel with no gaming; the 287-room Inn Hotel Macau – formerly known as Best Western Hotel Taipa.
Emperor Entertainment Hotel said the decline in group profit for the period was mainly due to: “a loss on fair value changes in investment properties and an impairment loss on prepaid lease payments; an exchange loss on offshore traded renminbi [Chinese currency] deposits held by the group due to abrupt devaluation of the renminbi since August 2015; and a moderate decline of revenue due to economic downturn”.
During the reporting period, the group’s gaming revenue fell by 16.2 percent year-on-year, to just over HKD1.45 billion. Such revenue accounted for 84.3 percent of the group’s total revenue.
“Nevertheless, the group managed to achieve a growth in revenue from the VIP room, leveraging its effective customer segmentation strategy in prioritising… VIP customers,” said the filing.
The group reported basic earnings per share of HKD0.20, compared to HKD0.39 the previous year.
During the year, group revenue declined 15.4 percent, to just over HKD1.72 billion.
The group’s earnings before interest, taxation, depreciation and amortisation (EBITDA) – after accounting for non-controlling interests – fell 18.0 percent year-on-year, to HKD520.6 million.
The firm said its EBITDA margin – after accounting for non-controlling interests – was 30.2 percent.
“Despite a challenging environment, the group managed to alleviate its revenue performance by effectively managing customer segmentation,” said Wednesday’s filing.
The board recommended a final dividend of HKD0.052 per share. Together with the interim dividend of HKD0.028 per share, the total dividends per share for the year are HKD0.08.
In a separate filing on Wednesday to the Hong Kong bourse, the firm’s parent, Emperor International Holdings Ltd, gave no timetable for completion of a shopping mall in downtown Macau, a short walk from the Grand Emperor Hotel. It said merely that “construction was in progress”.
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International Monetary Fund