South Shore Holdings Ltd, operator of troubled Macau hotel THE 13, has issued a profit warning from its hotel sector for the 12 months ended 31 March 2019.
In a filing to the Hong Kong Stock Exchange overnight, South Shore said it expects to make an impairment of around HK$4.7 billion (US$602 million) for the year according to the latest valuation report from an independent professional valuer.
It added that while the loss will have no effect on cash flows relevant to the group’s operation, it will significantly increase the group’s losses compared with the FY18 financial year. The company had recorded losses of HK$1.2 billion last year.
THE 13 was billed as the world’s most luxurious hotel when it was first mooted but despite holding a soft opening in August 2018 remains only partially available for private functions due to a number of hotel rooms remaining unfinished. It has also given no indication that it has any immediate plans to apply for a license to operate gaming under a potential “service agreement” arrangement it previously reached with Macau concessionaire Melco Resorts and Entertainment.
Only last month, South Shore revealed it had sold 24 of its fleet of 30 red Rolls-Royce Phantoms in order to pay down bank loans. The company has also been involved in ongoing discussions since January with “an associate of a substantial shareholder” over a proposed HK$1.5 billion investment into the company subsidiary that beneficially owns THE 13 Hotel.
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