GGRAsia – Kingston interim casino rev, gaming EBITDA negative

Kingston interim casino rev, gaming EBITDA negative

Kingston interim casino rev, gaming EBITDA negative

Gaming revenue at Kingston Financial Group Ltd, the operator of two so-called satellite casinos in Macau, was negative at just over HKD 20.9 million (US$ 2.7 million) for the six months ended Sept. 30, according to a filing from Thursday. That compares to a positive gaming revenue of almost HKD 18.8 million in the same period last year.

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) in the gaming segment for the first nine months of 2022 were negative HKD 43.4 million. It was slightly larger than the EBITDA loss of HKD 42.8 million a year earlier.

Kingston Financial has interests in the Macau satellite casinos Casa Real, on the city’s peninsula, and Grandview (pictured) in Taipa. The locations must continue to offer gaming until at least December 31coincident with the extended gambling rights until that date of the licensor, SJM Holdings Ltd.

The company noted in a filing filed Thursday with the Hong Kong Stock Exchange that the decline in visitors coming to Macau “had a negative impact” on the group’s gaming business.

“The group’s gaming and hotel revenues apparently declined as customers forgo physical visits [to the Macau properties] due to public health concerns” related to the Covid-19 pandemic, Kingston Financial stated.

It added: “It is uncertain when the negative impact on tourism and the gaming industry in Macau will end and when it will fully recover to pre-pandemic levels.”

As of September 30, the two Kingston Financial-linked casinos had a total of 69 tables in their respective mass-market halls and 262 slot machines. The group had no tables in the VIP segment, as the VIP rooms “closed in February 2022”.

Gaming commissions paid as an incentive to attract customers during the six months to September 30 fell about 81 percent year-on-year to about HKD 4.5 million. That was because “chip sales fell due to the closure of the VIP rooms in February 2022 and the decrease in visitor arrivals in Macau” during the reporting period, the company said.

Group profit fell 26.4 percent year-on-year to HKD 1.8 million in the six months to 30 September. The decrease was “primarily due to the impairment losses on customer advances in margin financing,” the company said.

Total group sales for the interim period rose 3.0 percent year-on-year to just over HKD 940.2 million.

Kingston Financial also provides financial services including securities brokerage, underwriting and placements; margin and IPO financing; business finance consultancy; futures brokerage; and asset management services.

At the end of October, Kingston Financial’s controlling shareholder made a proposal take the company private.

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