Summit Ascent Holding Ltd has announced a 20% increase in revenue for the first six months of 2017, due primarily to a 140% surge in VIP rolling chip turnover at its Tigre de Cristal integrated resort in the Russian city of Vladivostok.
Net revenue for the group came in at HK$204.6 million for the period, up from HK$170.2 million 12 months prior, with net revenue from its rolling chip business of HK$79.7 million. That figure represents a 48% year-on-year increase from the HK$53.9 million its rolling chip business derived in 1H16. Summit Ascent said the increase was due to higher VIP volume.
Tigre de Cristal’s operator Oriental Regent Limited, of which Summit Ascent holds a 60% stake, generated an Adjusted EBITDA of HK$56.9 million in 1H17, up 62% year-on-year, however net loss attributable to owners of the company was HK$5.4 million compared with a profit of HK$5.5 million over the same period in 2016.
The net loss arose primarily due to, “Depreciation and amortisation of HK$63.5 million; imputed interest of HK$19.8 million primarily arising from the non-interest bearing shareholders’ loans in Oriental Regent Limited; and absence of a gain on deemed disposal of interest in a joint venture amounting to HK$20.2 million as a result of corporate restructuring exercises taking place in 1H2016,” it said.
Mass table revenue for the period declined 19.6% year-on-year to RUB422 million (HK$57 million), which Summit Ascent said was due primarily to foreign banknotes not being allowed to be used for settling gaming wins or losses under the current Russian legislation.
“Foreign currency banknotes have to be converted into Russian ruble (RUB) banknotes first for the purpose of chip buying. This has discouraged a lot of our Asian customers from making sizeable bets on mass tables,” it said. “We are currently lobbying the Russian Government to allow foreign currency banknotes to be used by foreign patrons for the purpose of settling gaming wins or losses.”
However, the company is on track for a strong second half to 2017 in its VIP business with VIP rolling chip turnover of HK$4.3 billion and net win of HK$39 million in July and August.
Summit Ascent is also hoping new visa rules that came into force in August will aid its progress moving forward.
“The much anticipated simplified visa regime for foreign visitors to Vladivostok was implemented in the beginning of August 2017 and applies to foreign nationals from 18 countries including our major overseas feeder markets,” the company said. “We expect that this new visa regime, combined with increasing flight connectivity and ongoing efforts of the Russian government to promote the Russian Far East as a tourism destination, will accelerate the already explosive growth of foreign tourism and provide us optimism that there is additional room to further ramp up our business.”
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