Hong Kong-listed International Entertainment Corp (IEC) has issued a profit warning on what it says is an expected loss for the year ended 30 June 2024 of at least HK$135 million (US$17.3 million), reversing a HK$18.3 million (US$1.7 million) profit a year earlier.
The losses are mostly related to the company taking over operations of the casino at Manila’s New Coast Hotel in the Philippines from PAGCOR as of May, and its efforts to convert the hotel into a fully-fledged integrated resort.
In a filing, the company said that general and administrative expenses related to New Coast Hotel had risen by around HK$126.8 million (US$16.3 million) year-on-year, including one-time expenses of HK$40.9 million (US$5.2 million) for the establishment and operation of the casino and the development of the integrated resort.
IEC was granted a provisional casino license in September 2023 ahead of assuming full control of the former PAGCOR-run casino within the hotel that the company owns.
In its filing, IEC also pointed to an increase in interest expenses on bank borrowings of HK$37.4 million (US$4.8 million) in the year, also related to casino operations, as well as an increase in net foreign exchange loss.
The company added that the loss was in part due to the fact that it had only assumed control of the casino in May and as such revenue – which increased by 7.4% year-on-year to HK$15.3 million – generated under the gaming operations segment has not yet materialized for a full year.
“The Group considers the grant of the Provisional License will enhance its future earning capability and potential of the Group,” it said.
“The grant of the Provisional License will be a milestone development of the Group which denotes that the Group is able to operate and manage casino business and gaming activities independently.”
IEC’s full results for the year ended 30 June 2024 are due to be released later this month.
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