Rich Goldman tapers loss from VIP business

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Local junket operator Rich Goldman Holdings Limited – formerly Neptune Group Limited – announced that it has tapered its net loss for the year ended June 30 to HK$10.25 million (US$1.31 million/MOP10.55 million) down from HK$202.11 million registered a year before, according to a filing by the company with the Hong Kong Stock Exchange.
The company attributed the relative improvement in its fiscal year to the reversal of impairment loss of trade receivables amounting to HK$306.27 million during the period under review.
Rich Goldman further noted that the reconciliation of allowance for trade debtors reached some HK$407.28 million at the beginning of the year, up from HK$344.29 million at the beginning of 2016, with no impairment losses recognized in 2017, while they had reached HK$63 million in 2016.
Although lower than a year before, the group posted an impairment loss of intangible assets of HK$397.3 million for the year ended June 30 when compared to HK$450.9 million in 2016, being mainly attributable to the termination of two junket businesses linked to the company at The Venetian – Hou Wan Entertainment Company Limited and Hao Cai Sociedade Unipessoal Limitada –with effect this year.
However, revenue from the company’s gaming and entertainment business segment rose nearly 6 per cent to HK$295.45 million, up from HK$287.7 million, due to increased revenue from its VIP room operations at Sands Macao and Grand Lisboa, amounting to nearly HK$42.1 million and HK$3.3 million, respectively.
According to the company, the increase was ‘driven by an improving customer patronage and increasing gaming volume.’
Net profit of the group amounted to nearly HK$39.9 million, reverting from a net loss of HK$466.7 million a year earlier.
In addition to its VIP junket business in Macau, Rich Goldman principally engages in the money lending business and hotel operations.
Revenue from its money lending business, its second strongest segment, amounted to HK$1.10 million during the period.

Dealing with debt
Rich Goldman noted that after June 30, 2017, trade debtors of the company made a total payment of HK$386 million to the group, charging their properties located in Macau – worth a total of HK$39.97 million – to the group as securities for repayment of overdue trade debtors.
The company notes that it ‘considers the trade debtors that are neither past due nor impaired to be of a good quality,’ adding that the average credit period allowed to its trade customers ranges from 30 to 60 days.
The group entered into various agreements with trade debtors in September 2016, in which the latter agreed to settle overdue trade receivables of HK$517.47 million in monthly installments starting from October 2016.
Several properties located in Macau had been used as securities for repayment of overdue trade receivables, with a market value of HK$151.72 million as at October 2016.