Wire ASIA & OCEANIA
Star Ent. Warns of Financial Struggles
Australian casino operator Te Star Entertainment Group has warned investors about an impairment charge of between A$400m and A$1.6bn.
In an update to the ASX, Australian casino operator, Te Star Entertainment Group, has said its flagship Sydney casino has struggled over the first half of its financial year due to a government review and increased competition from Crown Sydney, causing it to warn investors of an impairment charge of between A$400m and A$1.6bn in its six month performance.
Te operator highlighted operational changes following a government review as well as the potential for an increase in state casino duty taxes for denting its performance. Te Star Gold Coast’s domestic revenue was up 30 per cent on pre-COVID levels, achieving its higher revenue result on record. Treasury Brisbane’s domestic revenue was up nine per cent on pre-COVID levels, with record performance across slots, main gaming floor tables and hospitality. But Te Star Sydney’s domestic revenue was down 13.5 per cent on pre-COVID levels. Overall, group revenue was down one per cent on pre- COVID levels.
Te operator stated: “First half earnings have been impacted by operational changes arising from the Bell and Gotterson Reviews, a step-up
in remediation costs and increased competition in Sydney. Whilst Te Star’s Queensland Casinos performed strongly in the period, the operating environment for Te Star Sydney has been more challenging. Te Star Sydney trading performance has been adversely impacted by several factors, in particular by increased operating restrictions from mid-September following the Bell Review and amendments to the NSW Casino Control Act.”
Tis saw an increase in the number of excluded patrons and a reduced level of complimentary services and benefits in private gaming areas impacting both slots and table games performance. Te Star has also been impacted by increased competition since the opening of Crown Sydney in August last year.
“Due to the impact of operational changes implemented following the Bell Review, amendments to the NSW Casino Control Act as well as the potential for an increase in NSW casino duty rates starting in FY24, Te Star is anticipating a non-cash impairment charge in relation to its NSW business in the range of $400m to $1.6bn in its 1H FY23 results.”
Singapore Future Tai casino sector will impact Singapore
Te future Tai casino sector could eat into Singapore’s casino revenues by as much as a quarter according to research by Maybank.
Maybank analyst Samuel Yin Shao Yang believes the birth of Tailand’s casino industry could ‘supercharge’ Tailand’s tourism sector taking Chinese visitation away from Singapore and Malaysia. Singapore could be especially at risk due to foreign players accounting for up to 75 per cent of Singapore’s gaming revenue.
Samuel said: “We do not expect many Malaysians and Indonesians to visit Tai IRs over the Singaporean ones should Tailand proceed to liberalise its IR industry due to deep personal
and commercial ties between the three countries. We would expect many Chinese to visit Tai IRs over the Singaporean ones should Tailand proceed to liberalise its IR industry.
“Tailand is already very popular with Chinese tourists even without IRs currently. We believe that the SG$1.5bn or five per cent of 2019 Singapore GGR derived from Chinese visitors could be as risk should Tai IRs materialise. We fear that Tai IRs could seriously impact Singaporean IRs negatively if they do materialise.”
New Zealand
New Zealand’s SkyCity Entertainment has reversed its $33.7m interim loss into a $22.8m profit over the first half of the year, marking a 168 per cent rebound in profitability.
Te Auckland-headquartered operator said it had seen a strong recovery across its business divisions, ‘following several years where its land- based operations were significantly impacted by Covid.’
Te strong rebound in domestic gaming, hospitality and tourism businesses following the return of international tourism saw a 59.6 per cent increase in revenue to NZ$462.6m and a 421 per cent increase in Group EBITDA to NZ$106.3m. Tis was fuelled by the company’s flagship casino SkyCity Auckland, where GGR increased by 166 per cent.
SOUTHEAST ASIA – Spintec Gaming Technology and Asia Pioneer Entertainment Limited have expanded their cooperation which started more than a decade ago.
APE as the largest electronic table game distributor in Asia has now become the exclusive distributor for Spintec products beside Macau also in Singapore, Philippines, and Malaysia, while also remaining their trusted partner in Vietnam and Cambodia. The three-year exclusive distribution agreement covering the large part of Southeast Asia is providing both partners with a valuable gambit to tackle the demands of the fast-growing market in the post- pandemic era.
With its sheer size and tight regulation, but especially with the introduction of the EGM 2.0 standard, the Macau market is becoming one of the most demanding gaming markets in the world. Spintec products are fully compliant with all the regulations in Macau, including the EGM 2.0, with APE confident that their presence in the demanding market will continue to flourish.
SINGAPORE - Genting Singapore saw an 85 per cent increase in income at its Resorts World Sentosa in Singapore with gaming revenues hitting US$921m, up 53 per cent year-on-year, and non- gaming revenues reaching US$367m, an increase of 90 per cent.
Full year revenues increased by 62 per cent from 2021 with the operator’s second half of the year 60 per cent higher than its first half coming in at US$794m. Gaming accounted for US$566m and non-gaming for US$230m.
“With the recovery of Singapore’s international visitors, the Group’s performance rebounded strongly, with Resorts World Sentosa outperforming significantly over the pandemic years,” Genting said.
SOUTH KOREA – Grand Korea Leisure, operator of three foreigner only casinos in South Korea, saw a net loss of US$7m in the three months to December 31 2022, from a US$3.9m profit in the previous quarter. However, for the year as a whole revenues soared by 208 per cent US$206m with the loss lessening to US$18m in 2022.
Its best performing casino was Gangnam COEX in Seoul which generated table revenues of US$928m whilst its Gangbuk Millenium Seoul Hilton licence benefitted from a relocation to Seoul Dragon City in December with a 117 per cent surge in table revenue to US$481m. Its other casino, Seven Luck Casino Busan Lotte, brought in table revenue of US$156m. Attendance improved in the mass segment with a 66.4 per cent increase to 333,000 in 2022, with VIP customers hitting 76,000, up 64.1 per cent.
WIRE / PULSE / INSIGHT / REPORTS P21
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