Amax Entertainment Holdings Limited, which has interests in Macau’s VIP junket aggregation market, reported a 564 percent increase in revenue to HKD300 million in the six months to 30th September 2008.
The revenue increase figures are skewed somewhat by the fact that the six-month totals are being compared with an initial performance over three and a half months. Amax only started operations in the Macau market in mid-December 2007. The figures also exclude the final four months of 2008, when Macau’s gaming revenue started to contract.
In the relevant six months Amax said it recorded a consolidated net profit of HKD219 million compared to a loss of HKD51 million in the previous period.
The company added that the results were primarily due to the contributions of the junket aggregation business operated by AMA International Limited (AMA) in which Hong Kong-listed Amax has an indirect 80% effective interest. AMA helped Amax grab an 18 percent share of the Macau VIP market within months by offering a headline grabbing 1.35 percent commission on rolling chip volume.
Rolling chip volume generated by AMA totalled HKD215 billion for the six months ended 30 September 2008, said Amax, including HKD95 billion of rolling chip volume for the three-month period ended 30 September 2008.
Amax added that its rolling chip volume for the September 2008 three month period “continued to represent market leading levels of VIP gaming volume achieved at an individual casino in Macau.”
Amax conceded though that it expected performance in the latter part of 2008 to be weaker than in the first half of 2008, due principally to visa restrictions, explaining the rules had “reduced travel of junket players, including primarily the lower tiers of Amax’s junket players, as well as creating a challenging consumer environment.”
The company said it had recently taken steps to enhance its operating and capital structure in order to “more accurately reflect the leverage of its junket aggregation model”.
In August Amax disposed of its non-core, legacy LCD business. Also that month Amax announced a share premium cancellation to eliminate the company’s previously accumulated losses, with the remaining balance credited to its contributed surplus account.
The company said it was relaxed about the expected imposition by the Macau government of a commission cap on rolling chip volume.
“We expect that, when effected, the implementation of a commission cap of 1.25% will further clarify Amax’s competitive advantages,” said Brian Cheung, Amax’s chairman.
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