Australia-listed casino operator Silver Heritage posted a US$4.58 million net loss, dragged down by the delays in the construction of its casino project in Nepal.
One silver lining in the data provided by Silver Heritage in its regulatory filing on Wednesday is the fact that its annual loss is 14 percent lower than it had predicted during its initial public offering in August 2016.
It would be recalled that the casino operator had earlier anticipated a $5.32 million annual loss for 2016 due to “the unexpected delays” in the completion of Tiger Palace Resort Bhairahawa.
Still, the loss that Silver Heritage incurred in 2016 is eight percent higher compared to $4.24 million in the prior year.
“The main reason for the improvement compared to the forecast in the prospectus was due to less expenses being incurred in setting up the operations of the Tiger Palace Resort Bhairahawa in FY2016 than were anticipated at the time the prospectus was prepared, as some of the costs associated with setting up operations, including staff training costs and marketing, were deferred until early FY 2017,” the casino operator explained.
Silver Heritage also reported results on its other operations in Vietnam, Nepal, and the Pacific island of Tinian in the Commonwealth of the Northern Mariana Islands, a U.S. jurisdiction, where it also operates electronic gaming.
The firm maintains that it continues to deliver strong returns on capital invested at the Phoenix International Club in Bac Ninh, Vietnam despite not achieving the quantum growth that it had expected.
Data showed that Phoenix’s gross gaming revenue slid by 6.1 percent to $16.96 million in 2016 due to additional gaming tables not being installed on the main gaming floor.
As for Silver Heritage’s electronic gaming machine lease business unit, the change in business model resulted to 56.4 percent slump in 2015 and 22.6 percent slide on the forecast included in the IPO prospectus. On the other hand, sales revenue was only 10.8 percent down on last year at $3.1 million.
For full-year 2016, the group recorded gross gaming revenue (GGR) of $32.13 million, down 29 percent from 2015.
Total group revenue was $16.91 million, down 2 percent. Adjusted earnings before interest, taxation, depreciation and amortization grew 11 percent to $3.36 million.
Looking forward, Silver Heritage is optimistic about 2017 especially after gaining “good momentum” in the first two months.
GGR at the Phoenix was up 20 percent year-on-year, after the first 58 days of the new calendar year, while equivalent revenue at The Millionaire’s Club and Casino in Kathmandu, Nepal, was down 5 percent.