Big 10 customers account for 2M
Imperial Pacific International Holdings, owner-operator of the sole casino resort on the Pacific island of Saipan, has recorded an impairment of trade receivables from its high-roller business of HK$2.08 billion (US$266.5 million) for the first half of 2017.
That includes US$162 million (HK$1.27 billion) from the resort’s 10 biggest customers. That’s a big jump over the impairment of $108.5 million (HK$847 million) for all of 2016. Impairment from Imperial Pacific’s 10 biggest customers rose from HK$346 million in 2016.
In a filing to the Hong Kong Stock Exchange on Friday, IPI said the increase was calculated “based on the management’s collective assessment on the recoverability of the customers’ outstanding trade receivables.”
IPI added that customers are extended credit for 30 days, and the VIP marketing department meets once a month to review and rank the debts.
“Once the receivables are overdue for repayment and if the customers still have not repaid the outstanding debts within six months of the program end date, the group’s credit and collection department will then issue demand letters to the customers, along with its guarantors (if applicable), for demand of immediate payments,” it said. “If no responses were received thereafter, the group’s management may consider bringing legal actions against the customers in order to collect the outstanding debts.”
In August IPI posted an 83.1 percent increase in gross revenue to HK$7.3 billion for the six months to June 30. Of that, HK$7.09 billion came from VIPs. VIP rolling chip volume on 16 tables reached HK$196.3 billion for the period, with each table averaging HK$443 million in revenue in the first six months of the year.
“A significant portion of our VIP casino customers are sourced through the group’s own marketing avenues,” IPI said. “Such high-spending VIP players generally receive commission and allowances based on a percentage of the rolling chip turnover. The group’s VIP players are also brought to us via intensive marketing campaigns. VIP gaming operations also include premium mass gaming operations that do not receive commissions from the group.
“In addition, a minor operation of the group’s VIP customers has been sourced via a new licensed junket operator since August 2016. The establishment of a new licensed junket incentive allowed the group to bring in new players which mitigated the group’s credit concerns.”
Geographically, IPI added, most of its VIPs come from China, Hong Kong, Macau, Korea and Saipan.
IPI recently relocated casino operations from its temporary Saipan facility, Best Sunshine Live, which operated out of a high-end shopping center, to the new Imperial Pacific Resort.
