Macau downturn played a part
Former food company and current casino investor Imperial Pacific International Holdings Ltd. has posted a loss attributable to owners of the company of HKD1.56 billion (US$201 million) for 2014, reports GGRAsia. That compares to HKD 14.95 million (US$1.9 million) in the previous year.
The Hong Kong-listed company, which has planned to spend up to US$7.1 billion on a massive casino resort on the Pacific island of Saipan, is also an investor in Macau junket firm Hengsheng Group. In January, Imperial Pacific said its profits from the alliance, which amounted to HKD10.7 million, had fallen short of projections.
“As there was a drop in rolling turnover generated during second half of year 2014 due to a significant downturn of Macau gaming sector, the expected cash inflow from this business segment decreased and therefore an impairment loss of approximately HKD1.3 billion in respect of intangible asset was recognized,” the firm reported.
The company also reported a loss of approximately HKD181 million in relation to the investment in Garapan, Saipan. The first phase is set to open by 2016, but analysts question the giant price tag, and wonder how the company can generate sufficient revenues to turn a profit. In December, an unnamed equity analyst told the South China Morning Post, “I don’t think anyone believes that a $7 billion investment would make sense in a place like Saipan. It’s unclear what type of revenue they would be able to generate and returns on investment.”
The company, which has signed a license agreement with the commonwealth of the Northern Mariana Islands, was originally known as First Natural Foods Holdings Ltd., but is now phasing out its food business.
