On Friday, 15th September, Imperial Pacific International Holdings, a Hong Kong-based operator of a casino resort on the island of Saipan, posted a report, reflecting the net losses of the company. The figures reveal that the company witnessed an impairment of trade receivables equated to HKD2.08 billion in total for the first half of the year. That compares to a loss of HKD847 million in the prior corresponding period. Imperial Pacific announced that HKD1.27 billion of the aforementioned total amount is an impairment of trade receivables due from its 10 largest customers.
Imperial Pacific in Figures
The company’s net profit for the 1H of the year, ending on 30th June equated to HKD912.0 million, which represents an increase of 8.9% in comparison to the net profit for the prior corresponding period. The company’s gross gaming revenue (GGR) for the first half of this year was reported to be HKD7.27 billion, whereas money gleaned from unaudited VIP table games equated to HKD196.3 billion, or 55.4% increase compared to the same period of the previous year. In August, representatives for Imperial Pacific explained that the company incurred a loss mainly because of the increase in impairment of trade receivables. The company registered an increase of its operating costs equated to 207.7% per year, or up to HKD2.92 billion.
Following the latest decline of Macau gambling industry, Imperial Pacific explained on its Friday’s filing that its customers’ outstanding invoices are within the permissible limit as they are independent of the junket market. Due to the company’s increased loss on the impairment charge, the rating agency Moody’s Investors Service Inc lowered Imperial Pacific’s rank, projecting that it is most likely that the company will not narrow this loss, but even the opposite.
Company’s Investments and Plans
The company invested heavily in a gambling facility located on the island of Saipan, entering the US market. At first, Imperial Pacific was authorized to run a temporary casino, also known as Best Sunshine Live, prior to the completion of its main casino project, which opened its doors as recently as 6th July under the name Imperial Pacific Resort. The company’s next financial report is to represent the money gleaned from the new Imperial Pacific Resort. It is worth to mention that with the opening of the new casino, Imperial Pacific aims to stabilize its net profit after the losses it suffered.
Apart from its casino venture on the island of Saipan, the company also invested in the Macau junket operator Hengsheng Group. This gaming profit sharing business turned out to be unprofitable for Imperial Pacific, and in 2015, the company terminated its loan and profit deal with Hengsheng Group.