Paradise Entertainment swings to 2015 loss as GGR falls, costs rise

Hong Kong-listed Paradise Entertainment swung to a loss in 2015 as revenue dropped in its casino management business and operating expenses, in particular labor costs, rose.

The firm reported a loss of HK$148.9 million (US$19.2 million) in 2015 from a profit of HK$66.5 million in 2014, according to a filing to the Hong Kong Stock Exchange.

For 2015, the group also reported a decrease in revenue of 8.4 percent to HK$1.1 billion, compared to HK$1.2 billion in 2014. The gaming service provider said the decrease was a result of a decline in tourists visiting Macau due to China’s anticorruption campaign, as well as “continuous challenges arising from the decrease in revenue of casino services.”

Adjusted EBITDA for the group dropped to HK$48.2 billion in 2015, down 76.3 percent from HK$203.1 billion in the year before.

Looking ahead, Paradise says the Macau government’s new policy allowing mainlanders to stay in Macau for longer than seven days and gain second entry within 30 days “will certainly benefit casino operators”. As well as this, the group also sees opportunity for more sales of LMG terminals overseas.

“The sales of 24 LMG terminals in February 2015 marked the beginning of sales of LMG terminals in the U.S. The group will see more sales overseas, and believes LMG terminals will soon gain acceptance throughout the U.S. gaming industry,” the company said in its filing.

“The group is also expected to develop its overseas gaming system market with more machine installations in 2016.”