Hong Kong-listed Summit Ascent Holdings, which operates the Tigre de Cristal integrated resort in Russia’s Primorye gaming zone, will begin construction of the property’s Phase 2 by the fourth quarter of 2020. But at this point, additional planned expansions may be shelved.
According to Inside Asian Gaming, Summit Ascent will instead diversify its revenue streams by investing in other gaming and entertainment markets.
In the first half of the year, the company posted a loss of US$6.1 million on a 63 percent revenue drop to US$12.4 million. Summit Ascent said the total cost of the expansion is now projected to cost US$200 million, with US$120 million from Summit Ascent based on its 60 percent interest in Tigre de Cristal operator Oriental Regent.
“Due to the recent redesigns with the input of Suncity, the Group has been reviewing and finalizing the conceptual designs of the Tigre de Cristal Phase II development on Lot 10, and planning to commence the construction works in the fourth quarter of 2020, targeting an opening in 2022,” it said. The company is one-quarter owned by Suncity Group Holdings.
“This new integrated resort is expected to double the group’s VIP and mass gaming tables, slots, and have at least twice the lodging capacity of the existing property, and will include four restaurants and bars, additional retail offerings, and an indoor beach club and spa. The Phase 2 development of Tigre de Cristal will place the group in a better position to attract and retain customers, especially when other casino operators in the IEZ Primorye open for business in the near future.”
At the same time, Summit Ascent has opted against further expansion of the property near the port city of Vladivostok. It will instead focus on a previously announced investment in SunTrust Home Developers Inc, Suncity’s Philippines-listed entity set up to develop a US$800 million integrated resort at Westside City Resorts World in Manila
“Whilst the directors remain cautiously optimistic about the long-term prospects of Tigre de Cristal in the Russian Federation, they are of the view that it is in the best interests of the company to diversify its assets and revenue streams in order to reduce the group’s reliance on a single revenue source and location,” the company said.
“From a geographic diversity point of view, the company has been exploring other business opportunities in order to expand the existing business of the group and to explore new markets with significant growth potential.”
The group reported that it had HK$816.7 million of cash on hand as of June 30, according to Asia Gaming Brief. “Unlike many businesses impacted by this global crisis, the group is well positioned to weather the current turmoil as it sits on huge piles of cash generated from the past years,” Summit Ascent said. “The group has ample liquidity to survive this unprecedented period of ‘near-zero revenue’ for over years. Tigre de Cristal has been able to deliver strong local businesses in the past few years, especially in the mass tables and slots. As borders are still not yet fully opened, the group will continue to focus on its strength previously–the local market.”
