Imperial Pacific International (IPI) has booked an 83.1% increase in gross revenue to HK$7.3 billion for the six months to 30 June 2017 on the back of surging VIP gaming operations which contributed the majority of its revenue for the period.
IPI reported VIP gaming revenue of HK$7.09 billion for the period, up from HK$3.8 billion year-on-year, with mass gaming tables adding HK$147 million (up 21.6%) and slot machines and ETGs contributing HK$34.1 million (up 27.5%).
VIP rolling chip volume across its 16 tables reached a staggering HK$196.3 billion, representing an 87.6% increase on volume of HK$104.7 billion over the same period in 2016, with each table averaging a staggering HK$443 million in revenue in the first half of the year.
In a filing to the Hong Kong Stock Exchange, IPI said it continues to source the majority of its own VIP players with a small percentage brought in via a licenses junket operator.
“A significant portion of our VIP casino customers is sourced through the group’s own marketing avenues,” it said. “Such high-spending VIP players generally receive commission and allowances based on a percentage of the rolling chip turnover.
“The Group’s VIP players are also brought to us via intensive marketing campaigns. VIP gaming operations also include premium mass gaming operations that do not receive commissions from the Group.
“In addition, a minor operation of the Group’s VIP customers has been sourced via a new licensed junket operator since August 2016. The establishment of a new licensed junket incentive allowed the Group to bring in new players which mitigated the Group’s credit concerns.
“Geographically, most of our direct VIP patrons are from China, Hong Kong, Macau, Korea and Saipan.”
IPI reported Adjusted EBITDA for the six months to 30 June 2017 of HK$1.6 billion, up from HK$1.3 billion year-on-year, with profit attributable to the owners of HK$912 million.
The company added that it plans to open new VIP gaming rooms by the end of the year after moving from its temporary Best Sunshine Live casino facility to Imperial Pacific Resort on 6 July. When complete, Imperial Pacific Resort will boast 193 gaming tables and 365 slot machines compared to just 48 tables and 141 slot machines today.
“With the transfer to the new casino completed, we believe that new players and clients will continue to be attracted to Saipan and hence broaden our client base,” the company said. “We are also planning to open more VIP gaming rooms by the end of 2017. With the gaming capacity to be further enhanced, we expect to commence collaboration with gaming promoters after they are granted junket operator licenses to operate on the Island of Saipan. Due to CNMI’s low tax regime, we believe we will be able to offer very competitive commission rates to our gaming promoters.”
However, IPI noted that it continues to be hampered by a lack of quality hotel rooms due to ongoing construction of Imperial Pacific Resort, which is due to be completed in the second half of 2018. Hotel occupancy rates through 30 June 2017 reached 92.1%, driven by a 37.4% increase in visitors to the island to 333,960.
“We currently have three villas and five yachts in place as well as hotel rooms secured from local high quality hotels to better provide accommodations to our VIP customers,” it said.
