Imperial Pacific International (IPI) says it expects the Office of the Governor of Saipan to grant its latest request for an extension to the construction deadline of Imperial Pacific Resort, despite reporting a significant increase in costs and decline in revenue in the six months to 30 June 2018.
IPI released its 1H18 financial results overnight – just in time for today’s 31 August construction deadline – with the company revealing a 50.7% decline in gross revenue for the period to HK$2.21 billion, compared with HK$4.52 billion in the same period last year. The total cost of construction has also reached US$708 million.
As reported by Inside Asian Gaming earlier this week, IPI has requested an extension of more than two years to December 2020, with the company putting the delays down to “the termination of construction services by certain companies and drastic reduction and non-availability of sufficient skilled and qualified construction laborers locally in Saipan and mainland USA.”
In its results announcement filed with the Hong Kong Stock Exchange late Thursday, IPI said, “Given the importance of the Casino License Agreement to the operation of the group’s only principal activity, IPI has initiated the application for submission to the Office of the Governor to extend the completion deadline, in accordance with the process as provided under the Casino License Agreement.
“As at the date of approval of this interim announcement, the Directors confirm that the management is in continuous discussion with the relevant government authorities and they expect the discussion will continue on or beyond the stipulated deadline on 31 August 2018.
“Based on the best of the information, knowledge and belief, the Directors are of the opinion that the necessary approval is likely to be granted for the deadline extension application and the operation of the gaming and resort business will not be affected.”
IPI moved gaming operations from its temporary Best Sunshine casino to the still under construction Imperial Pacific Resort last year, increasing the number of VIP tables from 16 to 30 and mass tables from 32 to 48. Nevertheless, its revenue took a major hit in 1H18 with VIP rolling chip down 48.9% to HK$100.3 billion and mass table drop down 16.3% to HK$387.6 million.
The company attributed the reduced turnover to the impact of the FIFA World Cup in Russia, which began in June, and to tightening marker credits. Most telling though was the provision for impairment of trade receivables from the remaining customers of the group, which amounted to HK$3.3 billion in 1H18, up from HK$2.9 billion in the same period in 2017.
IPI reported profit attributable to its owners for the six months of HK$79 million down from HK$912 million last year.