Additional costs and depreciation at its Tiger Palace Resort in Nepal has forced Silver Heritage to alter its 2018 first-half financials. It now says that the loss will be even greater than previously expected and will amount to almost $9.94 million. Last year, it reported a loss of $3.52 million.
The results were published in the company’s filing with the Australian Securities Exchange yesterday. Just prior to the announcement, Silver Heritage suspended shares trading on the exchange and doesn’t expect to begin trading again until tomorrow. The filing also said that the company is “currently working on a capital raising, the details of which are still being finalized.”
Additionally, said of OCP Asia, the company’s bondholder, “Once the capital raising is completed, the debt amortisation and redemption premium payments to OCP at the end of the year will not be at risk of default. The additional funds will be for working capital requirement whilst Tiger Palace Resort is still in the ramping up phase.”
As of June 30, the fair value of issued bonds was a little more than $16.9 million. They have an annual interest rate of 8% – which must be paid semi-annually if in arrears – and are redeemable at “any time prior to the date of maturity at a redemption price that will entitle the bondholders to an internal rate of return equal to 15 percent per annum on the original principal amount of the bonds.”
Silver Heritage stated in the filing that the greater loss was due to “additional interest expense no longer [being] capitalised following the completion of construction of Tiger Palace Resort.” The loss included an impairment in the amount of $1.18 million on unused electronic gaming machine software licenses that were supplied by Betstone Ltd. and Inspired Gaming Group.
In a positive note, the company’s first-half revenue increased to almost $11.28 million, an increase of 40.2% year-on-year. Last year, it reported revenue of $8.04 million. The increase was driven by the addition of Tiger Palace last December.
“Incremental” revenue growth has been seen at the company’s Phoenix International Club in Vietnam. Phoenix saw almost $5.93 million in revenue during the period, while its EBITDA (earnings before interest, taxes, depreciation and amortization) was $2.44 million.
The Millionaire’s Club and Casino in Kathmandu, Nepal took in almost $2.40 million during the first half of 2018. Its EBITDA was substantially lower, coming in at only $42,000.