Macau VIP junket Neptune Group Ltd reported a net loss of HK$257 million (US$33 million) in the first half of the fiscal year ended Dec. 31, 2015, compared to a net profit of HK$103.9 million in 2014, according to an interim report released on Monday.
Revenue from commission on rolling turnover decreased by 53 percent to approximately HK$133 million, compared to HK$283.9 million in 2014.
“We face a daunting challenge right now, seeing slumping profits and lacklustre turnover from the existing business model, which is no longer sustainable,” said the company.
The company says the overall macroeconomy and the sluggish performance of its VIP junket operators as a result of China’s anti-corruption campaign were the main reason for the slump, which, when combined with Macau’s 21st month of GGR decline in January, spells a difficult year ahead for the company.
“Another similar six to twelve months downturn is on the horizon,” warns the company.
In a chairman’s statement, Neptune Group’s chairman Danny Xuda Huang said the company will be looking at new sources of revenue given the difficult market conditions for VIP gaming. “As we come to the interim reporting of 2016, financial difficulties experienced by our operators remain a hard reality experienced by all and under tough conditions our Group’s underlying results continued to be impacted,” says the Neptune Group boss. “We will explore the financial sector, property accretion and other sectors that make sense for inclusion into our portfolio. Running parallel to our current business model this will allow a careful placement to shore up our turnover as well as our earnings,” he continued.
The company says the board of directors has resolved not to declare any interim dividend for the six months ended Dec. 31, 2015.