Imperial Pacific International (IPI) has issued a profit warning ahead of a “substantial decrease in profit” for the six months to 30 June 2018, due largely to the impairment of trade receivables – the company’s inability to recover money owed by its high rollers.
The company filed the warning with the Hong Kong Stock Exchange on Thursday, stating that the decrease when compared to last year was also a result of declining revenue at Imperial Pacific Resort, the Saipan IR that has come under increasing scrutiny in recent times due to workforce problems and a failure to meet construction deadlines. IPI recently revealed that it won’t meet its upcoming 31 August deadline for completion.
The profit warning also comes despite revenue of HK$13.3 billion and record VIP roll of HK$385.9 billion in 2017, with an average roll per table of HK$46 million on each of its 23 VIP tables – dwarfing the numbers reported by Macau’s biggest operators. However, IPI also reported outstanding receivables totaling HK$13.3 billion as of 31 December 2017, up from HK$5.9 billion a year earlier.
It’s been a tough week for IPI. Last Friday it was forced to issue a statement promising to pay all staff after experiencing “transfer issues” to fund the company’s payroll. The company also farewelled Chairman Marco Teng last week after seven months in the role, while Cai Lingli – a relative of majority owner Cui Li Jie – stepped down on Monday as a director of the company and chairperson of the executive committee.
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