GGRAsia – Asia Pioneer warns Apac casino closures could hurt its biz

Asia Pioneer warns Apac casino closures could hurt its biz

Apr 07, 2020 Newsdesk Industry Talk, Latest News, Philippines, Rest of Asia

Hong Kong-listed Asia Pioneer Entertainment Holdings Ltd says it expects the novel coronavirus pandemic to have a “material adverse impact” on the group’s financial performance and interim results of the group for the six months to June 30.

The group’s interests include Asia Pioneer Entertainment Ltd (APE), a Macau-based distribution, sales and servicing business for casino slot machines and electronic table games. The unit has business across the Asia-Pacific (Apac) region, and is also involved in leasing and consultancy work.

The parent firm noted in its Monday filing that two markets where it has interests – the Philippines and Cambodia – had respectively announced recently temporary suspension of casino operations as part of their efforts to prevent the further spread of the Covid-19 infection associated with the coronavirus.

The group identified potential issues regarding two business deals involving the APE unit. One was a finance lease agreement with Glimex Inc in December 2018 concerning leasing of certain electronic gaming equipment “for use at a casino in the Philippines”. The other was a finance lease agreement with Siam Star Leisure Co Ltd and Glimex, also dated to December 2018 regarding leasing of electronic gaming equipment “for use at a casino in Cambodia”.

In view of the pandemic and the casino suspensions in those countries, the directors of the Asia Pioneer Entertainment group considered that the “lessees may have difficulties in paying the lease rental in an aggregate amount of approximately HKD2.3 million (nearly US$300,000) in accordance with the payment schedules set out in the respective finance lease agreements,” said the filing.

The announcement added the group would “monitor closely the situation and will keep the shareholders and potential investors of the company informed”.

The parent had flagged in its 2019 annual report in late March that it expected its 2020 revenue from sales of electronic gaming equipment to be negatively affected – in common with the wider industry – by the novel coronavirus emergency. But the group had pledged to continue expanding its existing consulting services and its electronic gaming equipment leasing segment for the year ahead.