Paradise Entertainment Limited reported an 80 per cent year-on-year dip in profits for 2019 to some HK$10.6 million (US$1.3 million), with the gaming company deciding to stop management services at Casino Waldo, the group’s latest financial reported indicated.
Adjusted EBITDA from casinos under the group’s management went down 42.3 per cent year-on-year to HK$114.0 million.
However, the group’s revenues for last year still registered a slight 1.5 per cent year-on-year rise to HK$1.1 billion, due to an increase in revenue from sale of electronic gaming equipment and systems to HK$170 million.
Paradise is a holding company principally engaged in the provision of casino management services, and the development, sale and leasing of electronic gaming equipment and system.
The company provides management services Casino Kam Pek Paradise, which operates under a Sociedade de Jogos de Macau (SJM Holdings) concession license and at Casino Waldo, registered under a concession from Galaxy Entertainment Group.
The company considered that its drop in casino revenues was due to a fall in results at Casino Kam Pek Paradise last year, which was mainly affected by the temporary suspension of LMG terminals at the casino for upgrade of the LMG terminals.
While gaming results at dropped 11.3 per cent year-on-year at Casino Kam Pek Paradise to HK$1.2 billion, with Casino Waldo seeing an 8.6 per cent drop to HK$547.1 million.
Paradise also announced recent requirement to invest further for additional monitoring system and equipment to Casino Waldo to comply with new regulatory requirements which we considered that might be not recovered before the end of the existing gaming concession, the relatively high operating costs of the casino, and also the adverse impact from te Covid-19 pandemic, following the expiration of the related service contract on February 29 2020, it decided to cease providing casino management services in Casino Waldo starting from March 1.
‘The Group shall then concentrate its focus on the operations of Casino Kam Pak
Paradise so as to maximise the return from the provision of casino management service in this casino to the Group,’ the reported indicated.
Paradise also had to pay HK$23.2 million in reimbursements to SJM of employees’ bonus under a relevant bonus scheme for those gaming operation employees employed by SJM who work for the casino under the Group’s management.
‘As at 31 December 2019, the Group had completed the upgrade of all the LMG terminals at the two casinos under the Group’s management for full compliance with the Technical Standards and installation of enhanced features to the LMG terminals,’ the company stated.