Junket operator Neptune Group Ltd. experienced loss from previous profit for its fiscal year ended June 30 this year, with a net loss attributable to owners of the company of HK$828 million (US$103 million) registered. Claiming the bad performance is due to ‘the spectacular slowdown’ in the local VIP gaming industry, it said it may consider quitting if no improvements are apparent in the coming years. According to its filing with Hong Kong Stock Exchange on Friday night, Neptune saw its gaming revenue slashed by some 33 per cent year-on-year to HK$473.6 million, driven by the plunges in revenues generated by its three VIP rooms in the city, located in The Venetian Macao, Sands Macao and Grand Lisboa, down 38.2 per cent, 32.3 per cent and 25.2 per cent year-on-year, respectively. In addition, the revenues generated by its previous VIP room in StarWorld Hotel, of which the business has already ceased, also dived by nearly 60 per cent for the year. The shrinkage of the operator’s VIP gaming business led its EIBTADA loss to reach HK$997.8 million, a huge slide of 292.8 per cent year-on-year, or HK$1.52 billion, compared to an EBITDA of HK$517.6 million last year. Quitting an option Describing the VIP gaming slowdown in the Special Administrative Region as “an analogous condition happening” that it had never faced before in the last five years, the junket operator also mentioned its intention of exiting the local market if no upturn transpires. ‘The Group may not resolutely continue its presence in the Macau VIP gaming industry anymore if this situation doesn’t correct itself in the coming years. Management now face pressing concerns, like scrambling to stem profit slides from weak turnover and trying to maintain a healthy cash flow to explore other business opportunities,’ it claimed. ‘Revenue generated by the VIP gaming business has dropped to the lowest level recently recorded. It has already formed a downward trajectory that requires strenuous external and internal efforts to look forward to a rebound, if possible,’ it said. According to the filing, the company said it might consider entering the money lending business, as well as the securities investment business in order to diversify its source of income and achieve better returns. ‘We are still both sceptical and prudent about the future developments of the Macau gaming industry on its path to recovery when more new casinos open up in 2016 and looser travel restrictions on Chinese nationals might boost optimism,’ it anticipated.
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