On Monday, the Neptune Group filed papers with the Hong Kong Stock Exchange (HKSE) alerting investors to the fact that the company had failed to publicize its 2015-16 annual results by the stipulated Sept. 30 deadline.
The company further declared that the delivery to shareholders of its 2015-16 annual report could also be delayed. Neptune said it was “still in the progress of providing all necessary information requested by the auditors of the Company to complete the auditing procedures.” Neptune said it would use “its best endeavors” to publish the annual results “as soon as possible.”
In cases where companies are unable to publish official results, HKSE rules require listed firms to publish unaudited consolidated management accounts, as far as the info is available.
Neptune says this “would not be appropriate” at this point given the likelihood of “significant adjustments” that would render the current figures “incapable of truly and fairly reflecting the financial performance and position of the Group.” Neptune believes publishing the current figures “could be confusing and misleading” for shareholders.
As a result of the delays, Neptune has postponed its scheduled Sept. 21 board meeting, at which the directors were supposed to approve the annual results. The company says it will reschedule once the board receives the final results.
In August, Neptune warned shareholders that it expected to record “a significant loss” for the 12 months ending June 30. The company’s H1 results covering the six months ending Dec. 31, 2015 had showed a net loss of $33m. That followed a $103m loss in the 2014-15 fiscal year.
Neptune’s hard times reflect the broader struggles of Macau’s VIP market, which has decimated the junket market, consolidating power in the hands of a few operators. Union Gaming analysts say the big three – SunCity, Neptune and Tak Chun – control roughly 80% of Macau’s VIP market, up from as low as 45% just a few years ago.
But Neptune, whose peak market share was estimated at around 20%, has fallen on hard times. A year ago, Neptune was publicly mulling getting out of the VIP game entirely, although chairman Danny Xuha Huang later deemed those public comments “overly pessimistic.”
Macau’s VIP woes are in part driven by the inability of VIPs to honor their gambling markers. This spring, Daiwa Securities estimated that junkets were collectively holding $8b in uncollectable gambling debts, and even relative minnows like Iao Kun Group recently copped to chasing $159m in unpaid gambling debts.