Losses due to “intense competition”
Success Dragon International Holdings Ltd. has ceased operations at its Landmark Macau hotel due to widening losses in the six months that ended September 30.
In the company’s interim financial results, it posted a loss of HK$28.6 million, slightly down from a loss of HK$30.2 million in the prior-year period, Inside Asian Gaming reports.
Although group-wide loss improved, revenue from Macau gaming was down 5.7 percent from HK$64 million to HK$60.4 million, “mainly attributable to intense competition in the Macau gaming market faced by the group.”
Success Dragon also recorded a HK$9.2 million (US$1.179 million) loss from its gaming segment, up from HK$2 million in 2016, attributable mostly to the Landmark Macau.
“Despite the cost control measures implemented by the group in Macau operations, the loss from such segment increased,” the company said, adding it was “mainly due to heavy operating cost and worse performance of one of the operation outlets located at the Landmark Macau. As a result, the management of the group decided to cease such operation at The Landmark Macau as at the end of the period under review.”
The group posted total revenues of HK$65.8 million (US$8.43 million) in the first half, down from HK$81.7 million in the prior year period. Its loss for the period was HK$28.6 million, compared to HK$30.2 million in 2016.
Macau Legend Development Limited announced last month that it agreed to sell the Landmark Macau to a group of four buyers for a total of HK$4.6 billion, including its Pharaoh’s Palace Casino which includes 60 mass market gaming tables, 17 VIP gaming tables and 141 slot machines and operates under the SJM license.
Reports indicate that Macau property investor Chong Sio Kin plans to buy the hotel pending regulatory approval. Chong, a junket partner to Macau Legend, told GGRAsia, “Our aim is to enhance the gaming business at the Landmark Macau, but we are yet to form a concrete plan as to the positioning and improving the gaming services at the property.” Gaming revenue at the hotel casino fell 22.6 percent year-on-year in the first six months of 2017, according to the seller.
Chong’s firm, Dong Lap Hong Property Investment Co. Ltd., will acquire a 58 percent stake in Landmark according to a filing to the Hong Kong Stock Exchange from Macau Legend. Macau Legend CEO David Chow Kam Fai and one of the group’s wholly-owned units is selling 100 percent of the equity in the Landmark for HKD4.6 billion (US$589.7 million).
Chong currently is an investor in a junket operation at the Landmark, a business he started in 2004. The filing stated that under a participation agreement, wholly-owned Macau Legend unit Hong Hock Development Co. Ltd. would provide gaming services at Landmark “for as long as SJM Holdings maintains its status as a gaming concessionaire in Macau.” SJM’s current concession is due to expire in 2020.
