Hong Kong-listed casino investor Summit Ascent international has announced a 46% increase in revenue from its Russian integrated resort, Tigre de Cristal, in Vladivostok in 2017, due primarily to a 33% surge in rolling chip turnover.
Group wide revenue increased to HK$470.8 million for the year, up from HK$323.3 million in 2016, while Adjusted Property EBITDA generated by Oriental Regent Limited, the subsidiary that operates Tigre de Cristal, was HK$173.7 million – up 32% year-on-year. Profit attributable to owners of the company was HK$13.8 million for the year ended 31 December 2017, a huge increase on the HK$559,000 Summit Ascent collected in 2016.
The company attributed the positive results to its rolling chip program which saw turnover grow from HK$14.1 billion in 2017 to HK$18.8 billion last year. VIP revenue increased 7.1% to HK$182 million.
“Despite occasional inclement weather in the winter months, recent improvements in highway infrastructure, increased airline flight frequency and the free electronic visa policy in the Russian Far East have lessened the impact of seasonal factors on our rolling chip business notably compared to previous years,” Summit Acent said in a Thursday filing.
Mass revenue grew by 13%, from HK$117 million in 2016 to HK$132 million in 2017, with mass table drop up by a similar amount to HK$577 million.
The positive results come less than three months after Melco Resorts boss Lawrence Ho stepped down as Chairman and CEO of Summit Ascent and sold off his entire 17.37% stake in the company. He had previously reduced his stake from a high of 27.71% amid concerns over the possible doubling of Russia’s gaming tax, which would have cost Tigre de Cristal an extra US$1.86 million a year.
Those concerns have been alleviated for now, with the local parliament of Primorsky Krai voting on 28 February to maintain the gaming tax rates at existing levels, despite new federal laws allowing for an increase.
Commenting on Summit Ascent’s 2017 results, recently appointed Chairman Kuo Jen Hao said that growth was achieved during “a period of substantial ownership changes at the Summit Ascent level, the changeover of Chief Operating Officer at Tigre de Cristal, policy uncertainties regarding gaming taxes in the Russian Federation as well as geopolitical instability in the region.
“I am proud to state that Summit Ascent remains fully committed to our majority-owned asset Tigre de Cristal and our Phase II project in the Russian Far East. I strongly believe in the massive potential of tourism growth in the Russian Far East and that outbound tourism and investment will be a key success factor in China’s ‘One Belt, One Road’ strategy.
“I also believe that our strategy of developing both gaming and non-gaming facilities will enhance the attractiveness of the Russian Far East as a tourism destination for customers from nearby Asian countries and will help our casino, hotel and restaurant business to continue to expand.
“With the support and cooperation of our devoted management team and staff, a pro-business government in the Russian Far East and our new shareholders and investment partners, I maintain a positive view towards Summit Ascent’s business prospects going forward.”
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