Macau junket operator Neptune Group has posted a net loss of HKD828 million ($103m) for the fiscal year ended June 30 due to the “spectacular slowdown” in the local VIP gaming industry.
According to its filing with Hong Kong Stock Exchange on Friday, Neptune Group Ltd’s gaming revenue is down by 33% year-on-year to HKD473.6 million, driven by the plunges in revenues generated by its three VIP rooms in The Venetian Macao, Sands Macao and Grand Lisboa, which dropped 38.2%, 32.3% and 25.2% year-on-year, respectively.
The revenues generated by its former VIP room in StarWorld Hotel, where business has already ceased, also dived by nearly 60% for the year.
The decline in VIP gaming business led Neptune’s EBITDA loss to reach HK$997.8 million, a huge slide of 292.8% (HKD1.52 billion) year-on-year, compared to EBITDA of HKD517.6 million last year, prompting the company to think about shutting down the business.
“The Group may not resolutely continue its presence in the Macau VIP gaming industry anymore if this situation doesn’t correct itself in the coming years. Management now face pressing concerns, like scrambling to stem profit slides from weak turnover and trying to maintain a healthy cash flow to explore other business opportunities,’ said the company. “Revenue generated by the VIP gaming business has dropped to the lowest level recently recorded. It has already formed a downward trajectory that requires strenuous external and internal efforts to look forward to a rebound, if possible.”
The company also added that it might consider entering the money lending and securities investment businesses in order to diversify its source of income and achieve better returns.
“We are still both skeptical and prudent about the future developments of the Macau gaming industry on its path to recovery when more new casinos open up in 2016 and looser travel restrictions on Chinese nationals might boost optimism,” said the company.
Hong Kong court adjourns Macau junket figure trial until March
A Hong Kong court on Thursday adjourned the trial of Cheung Chi-tai (in the picture), a former major shareholder of the Neptune Group.
Cheung faces three charges of laundering HK$1.8 billion ($232m) through his Hong Kong bank accounts.
The court adjourned Cheung’s trial until March 24, to give Hong Kong authorities time to cooperate with Macau officials and disentangle some of the complex issues involved. It has also ordered Cheung to pay an extra HK$100,000 in bail and report to the police every two weeks.
Cheung’s lawyer Kevin Tang said his client was not a flight risk, adding that he was still active in managing his businesses in Macau and China and remained the key decision maker.
“If he wants to hide or run away, he could have done it a long time ago,” Tang told reporters outside the court. “Even if he hides in Macau, Hong Kong can’t do anything about it.”
The court allowed Cheung to receive a travel document to deal with his investments in China, including real estate projects in the cities of Shanghai and Dongguan, worth HKD100 million and HKD40 million, respectively, and a HKD35 million investment in a pawn shop in Zhuhai.