Macau casino operator Emperor Entertainment Hotel Limited, which runs the Grand Emperor Hotel and Inn Hotel Macau, has declared its future prospects bright despite a 7.1% decline in revenue for the year ended 31 March 2018, including an 8.1% fall in revenue from gaming operations.
Emperor Entertainment declared revenue of HK$1.50 billion for the year, down from HK$1.61 billion 12 months earlier, with gross profit down 9% to HK$958.9 million. Revenue from gaming operations at Grand Emperor Hotel fell 8.1% to HK$1.25 billion with Adjusted EBITDA down 9.4% to HK$448.8 million.
Profit attributable to owners of the company increased 13.6% to HK$393.6 million “mainly due to a decrease of selling and marketing expenses and exchange loss, as well as a revaluation gain recognized during the year, as compared to a revaluation loss in the last year.”
Discussing the revenue decline, Emperor Entertainment pointed to the increased flow of customers to Macau’s Cotai properties as having negatively impacted operations on the peninsula.
“With a raft of new gaming offerings and family-friendly recreations, the new establishments have attracted leisure travelers, who are typically mass- market players,” the company said. “The market share of gaming on Macau Peninsula, especially in the mass segment, was diluted by the competition from new properties on Cotai.”
Emperor Entertainment said that the group’s performance was “inevitably affected” by the Cotai shift with mass revenue down 7.2% to HK$1.29 billion. VIP revenue also declined over the course of the 12 months, down 9.3% from HK$24.7 billion in 2017 to HK$22.4 billion.
The casino at Grand Emperor Hotel comprises 67 mass tables, 10 VIP tables and 172 slot machines.
Despite the results, Emperor Entertainment said it was optimistic about the road ahead given ongoing growth in the broader Macau gaming market.
“Upon the completion of large-scale tourism projects, along with government initiatives to boost infrastructure development, Macau’s position as a global leisure and tourism hub will be further reinforced,” it said.
“On the demand side, sustained growth in Macau’s gaming market is expected on the back of the increase in numbers of Chinese outbound travelers, which is largely driven by the expanding wealth effect and the rise of China’s middle class. The group is optimistic regarding growth prospects for Macau’s gaming market and is actively reviewing growth strategies and value-creating opportunities in Macau.”
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