Casino operator Landing International Development has warned investors that it expects to book a net loss for 2018.
On Monday, Landing issued a profit warning to the Hong Kong Stock Exchange that previewed an expected net loss for 2018. The company didn’t offer a range of values for this expected loss, meaning investors will have to wait until the official results are issued in late March. Investors mostly took the news in stride, keeping the share price relatively unchanged ahead of the Lunar New Year market close.
Landing did say that the loss is attributable to the “absence” of around HK$657m (US$83.7m) in profit from discontinued operations of its lighting business in China and its gaming business in the United Kingdom. Another ‘absence’ of HK$209m stemmed from the reversal of impairment of trade receivables the company booked in 2017.
The company also booked higher expenses from its ongoing efforts to open its Jeju Shinhwa World resort casino in South Korea. Last November, the company announced that its scheduled 2018 opening had been pushed back to 2019 due to the Korean government slow-rolling the project’s occupation permits.
Delayed permits and dodgy finances weren’t the only issues plaguing Landing’s 2018 performance. The company’s plans to build a major gaming venue in Manila’s Entertainment City casino zone came to naught when Philippine President Rodrigo Duterte questioned the legality of the lease contract.
Last August, the company’s chairman Yang Zhihui abruptly disappeared, allegedly after being detained at Cambodia’s international airport and repatriated to China at the request of Chinese authorities. Landing’s inability to offer any details on Yang’s disappearance resulted in a sharp sell-off of the company’s stock while Chinese VIP gamblers reportedly rushed to cash out their accounts at Landing’s existing Hyatt Regency Jeju casino.
In November, Yang reportedly reappeared as mysteriously as he’d vanished, and the company said only that he’d been “assisting” the Chinese government’s investigation of a separate company’s alleged corruption.
Last Christmas Eve, Landing announced that it had appointed Zenith CPA Ltd as its new auditor following the resignation of PricewaterhouseCoopers (PwC). Landing said PwC’s resignation letter indicated that a number of factors had led to PwC’s decision to quit, including “the level of audit fees, their available internal resources and the professional risk associated with the audit.”
