GGRAsia – Casino junket investor Neptune slims net loss in 2016

Casino junket investor Neptune slims net loss in 2016

Dec 22, 2016 Newsdesk Latest News, Macau, Top of the deck

Macau casino junket investor Neptune Group Ltd significantly narrowed its annual net loss in the financial year ending June 30. Such loss was approximately HKD202.11 million (US$26.0 million) compared to HKD828.01 million in the prior-year period, the firm said in a filing on Wednesday to the Hong Kong Stock Exchange.

The loss per share was HKD0.43, compared to HKD1.79 in the previous financial year.

But money owed to the company in the form of trade and other receivables for fiscal 2016 increased by 68.0 percent year-on-year, to nearly HKD525.19 million. The fiscal 2016 figure excluded HKD407.29 million judged as impairment loss. Of the gross receivables due prior to impairment loss, HKD653.82 million was over 365 days old, according to the filing.

Neptune reported that after the June 30 reporting period – but up to the date of approval of the consolidated financial statements – customers settled trade receivables amounting to approximately HKD373.46 million.

For the financial year ended June 30, the group’s gaming revenue fell by 41.2 percent year-on-year, to approximately HKD278.7 million.

Neptune, once described by investment analysts as one of the biggest investors in Macau junket operations, had three VIP rooms under its own branding during the reporting period according to Wednesday’s filing. They were: Venetian Neptune GD VIP Club at the Venetian Macao; and Sands Neptune GD VIP Club at Sands Macao – both properties of Sands China Ltd; and Neptune GD 31 Sky Club at Grand Lisboa, a property operated by SJM Holdings Ltd. Annual revenue at the three venues fell 19.6 percent, 33.0 percent and 55.2 percent respectively, according to the annual results.

“Our revenue was cohesive to the performance of our beleaguered counterparties who confronted head to head competition for Chinese players like all others,” said Neptune in its discussion of the annual results.

Neptune’s fiscal 2016 earnings before interest, taxation, depreciation and amortisation (EBITDA) showed a loss of HKD260.5 million, compared to an EBITDA loss of HKD997.8 million in the prior year.

Management nonetheless stated: “Last year, many [public] policies have been implemented that have discernible impact on gaming demand or spending, such as the pressing ahead of the anticorruption drive, slowdown in China economy which has already been buffeted by the global slowdown, government’s policy to curb Chinese bank card withdrawal limits per transaction and on daily limits, limitation of visa entry, etc.”

Neptune added in its commentary: “Slapped by all these government monitoring measures on inordinate capital outflow from China, Macau gaming promoters and concessionaires had experienced overall downfall in revenue for 26 consecutive months commencing from middle of 2014 up to July 2016. It is only until recent months that the overall gross gaming revenue has resumed positive year-on-year annual growth from the low figures recorded in 2015.”