Chinese lottery company Rexlot Holdings recorded a widened loss of approximately HK$416.1 million (US$53.5 million) for the year ended Dec. 31, 2016, compared to HK$205.4 million in 2015.
Revenue of the group went down 19.4 percent year-on-year to HK$1.3 billion, compared to HK$1.6 billion in 2015.
Rexlot said the decline in revenue was mainly due to the slowdown of the industry development, as well as a challenging operating environment particularly in the scratch card and paperless electronic lottery distribution markets.”
“Keen market competition substantially increased the cost of sales/ services and selling and distribution expenses including salary, marketing cost and other operating costs in China. The slowdown of economy growth in China and the tightening of capital controls have posed another set of challenges to the Group’s operations. In response to these macro-environmental factors, the Group strictly adhered to a prudent approach to financial management during the year under review,” the company added.
Rexlot however, says it has embarked on a transformation to restructure its Welfare Computer Ticket Games (CTG) business in order to better adapt to the new conditions in the market.
“In January 2016, the Company announced a plan to realise one of its long-term investments in the traditional Welfare CTG market which covered business operations of the manufacturing and provision of Welfare CTG machines and supporting systems for the traditional lottery market.”
The board does not recommend the payment of dividend for the year ended Dec. 31, 2016.