Asia Pioneer Entertainment issues profit warning

Macau-based casino supplier Asia Pioneer Entertainment (APE) has issued its shareholders with a profit warning, indicating that the company expects to record a loss before tax of approximately HK$32.0m (£3.0m/€3.5m/$4.1m) for 2020.

The expected loss is compared to a loss before tax of HK$1.7m for the year ended 31 December 2019, and reflects a decrease in the supplier’s revenue from around HK$82.0m to HK$40.5m year-on-year.

The supplier’s gross profit has decreased by approximately 63%, from HK$28.6m to HK$10.5m for the year.

APE’s board of directors said that the expected loss, and decreases in revenue and gross profit, were mainly attributable to the termination of two of the its finance lease agreements in 2020, and the ongoing impact of the novel coronavirus (Covid-19) pandemic.

Termination of the two finance lease agreements on 21 May caused a one-off impairment cost of approximately HK$22.9m.

The closure of land-based casinos as a result of the Covid-19 pandemic, meanwhile, has led to weaker demand for technical sales and distribution of electronic gaming equipment.

Revenue from technical sales and distribution of electronic gaming equipment, consulting and technical services, and repair services, are expected to decrease by 51%, 42% and 61% respectively.

The board stated that the one-off impairment loss will not affect the supplier’s long-term financial stability.

For 2020, it expects to record positive net operating cash flow of HK$800,000, compared to a negative net operating cash flow of HK$2.7m.

It said the expected increase in operating cash flow is mainly attributable to better management of trade receivables.

The cash and cash equivalent of the company is also expected to increase by around 11%, from approximately HK$43.6m to HK$38.2m.

Results published in January showed that gross gambling revenue (GGR) in Macau was down close to 80% in 2020, as the region suffered enforced closures and travel restrictions as a result of the pandemic.

Share This Article:

More Similar Articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here