IPI posts two-fold growth in VIP revenue, profit decline in 2017

Imperial Pacific International saw strong growth in VIP revenue in 2017, but increased expenses and impairments pushed the operator to post a 31.9 percent decrease in profit in 2017.

Such profit was HK$637.5 million, compared to HK$935.6 million in the previous year.

IPI said the drop in profit was mainly attributed to an increase in impairment losses of trade receivables, as well as an increase in operating and administrative expenses in the year.

Gross revenue however increased nearly three-fold in the year, reaching HK$13.2 billion compared to HK$5.7 billion in 2016.

The company, which derives most of its revenue from its VIP gaming business, saw VIP table games rolling of HK$385.9 billion, up 53.6 percent year-on-year.

“The growth in VIP gaming revenue is attributable to the group’s effective marketing campaigns and increasing tourist visitation to CNMI. Our VIP customers primarily consist of credit players. Geographically, most of our direct VIP customers are come from China, Hong Kong, Macau and Korea,” said IPI in a note on Thursday.

Mass, slots and ETG revenue only slightly increased in the year.

Going forward, IPI said it will continue to review its mass gaming areas to maximize table utilization, and to expand its gaming areas to enhance table productivity and customer retention. It will also re-examine the mix of its slot machines and ETG games in operation to maximize our casino profitability, it said.

Last month, IPI said it was planning to propose an extension to the August 31, 2018 resort completion deadline.

A lawyer representing the casino operator at the time said the decision would give enough time for IPI’s engineers and the contractors to complete construction in a “safe engineering manner.”

A progress report submitted by IPI showed that construction work had slowed down significantly since its prime contractor, MCC International, left the island for hiring illegal workers.