Local junket operator Neptune Group Limited saw a complete turnaround in its profit results for the final six months of last year when compared to the previous year, according to the company’s filing with the Hong Kong Stock Exchange.
Going from a loss of HK250.5 million (US$31.3 million) in the last half of 2015, the group turned around to a HK$39.8 million profit in the final months of 2016 despite not seeing a large increase in revenue – which ticked up from HK$132.95 million to HK$135.93 million. The underlying profit to shareholders was HK$25.9 million for the period.
In addition, the group’s general and administrative expenses posted an increase of 53.9 per cent year-on-year for the period to HK$4.36 million during the second half of ‘yet another year of difficult economic conditions,’ according to the filing.
However, commenting upon the uptick, the group noted that ‘signs of improving customer patronage and gaming turnovers have been witnessed this year,’ adding that ‘whilst the overall market sentiment remained conservative, the recovery signs have been at least a welcome one after past years of double digit downturn since mid-2014.’
Optimism
Overall, regarding the market, the junket group notes it is ‘optimistic […] since the industry has shown the first sight of a positive growth,’ and the company saw rolling chip turnover revenue ‘just under’ HK$136 million for the six-month period, a HK$3 million increase from the same period in 2015.
‘While General and Administrative expenses have marginally increased, extra efforts and focus in 2016 have been placed by management to collect trade receivables that have been long overdue from some of our business partners,’ notes the group, calling the result of its efforts ‘a positive one.’
The group focused on collecting debts ‘over 365 days’ old, amounting to an outstanding amount for the group of HK$654 million in 2015, which they managed to nearly halve to HK$363 million for 2016, bringing ‘much needed cash flow to our balance sheet.’
‘Our group’s cash flow has accordingly recorded significant increment after successful collection of the receivables,’ notes the filing.
‘With the additional cash on hand, our group will keep developing the new money lending business and continue exploring new investment opportunities,’ notes the filing.
The group reported that its cash and cash equivalents as at end-2016 amounted to HK$664.7 million, a 347.6 per cent increase from the HK$148.5 the group had on hand at end-2015.
It further stated its intent to continue actively collecting debts, noting that ‘the hard efforts will not be let off and we will continue to manage the trade receivables effectively and ensure repayment schedule has been met.’
