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Paradise Entertainment Ltd, a manufacturer of casino games and a casino operations company, announced a HKD189.2 million (US$24.3 million) net loss for the full year 2020, compared to a HKD926,000 profit in 2019, according to a filing with the Hong Kong Stock Exchange on Thursday.
According to the community, the findings were “strongly affected” by the Covid-19 epidemic and subsequent travel protocols.
Pandemic’s significant affect
The pandemic brought the global travel and tourism industry “almost to a standstill,” according to Paradise Entertainment managing director and chairman Jay Chun, who was cited in the release as saying that Macau’s gaming business was “significantly disrupted.”
Revenue dropped 70.2 percent to HKD351.7 million in 2020, down from just over HKD1.18 billion the previous year.
In calendar year 2020, Macau’s total casino gross gaming revenue (GGR) declined by 79.3 percent year on year.
For the year ended December 31, Paradise Entertainment’s adjusted earnings before interest, royalties, depreciation, and amortisation (EBITDA) is negative, at HKD101.1 million, relative to HKD87.0 million in 2019.
The lack of revenue from casino management services after it ceased to operate casino operations at Casino Waldo, a so-called satellite venue in Macau under the licence of Macau concessionaire Galaxy Entertainment Group Ltd, was cited as a factor in the group’s poorer 2020 results.
Under the licence of Macau concessionaire SJM Holdings Ltd, Paradise Entertainment continues to operate the casino at Casino Kam Pek Paradise.
GGR at Casino Kam Pek Paradise was HKD556.6 million, down 56.2 percent year on year. In 2020, the property added a HKD42.7 million loss to the group’s adjusted EBITDA.
In comparison, revenue from the selling of electronic gaming devices and systems fell 85.8 percent to just under HKD25.3 million in 2020, down from HKD177.6 million the previous year.
In Macau, Paradise Entertainment sold 23 slot machines overseas and 20 terminals of its electronic table game product series Live Multi Game (LMG), while also upgrading 438 LMG terminals.
Last year, the computer gaming devices and systems division had a negative EBITDA of HKD71.6 million, largely due to HKD64 million in research and development costs, compared to a positive EBITDA of HKD5.4 million the year before.
Investing in high tech goods
In his remarks in the results filing, Mr Chun said that Paradise Entertainment had been investing in “high-tech” goods that would create “fresh revenue streams for the group in the years ahead.” He went on to say that “high-tech and [the] gaming industry will merge more closely in the future.”
LT Game Ltd, a manufacturer of electronic gaming equipment and operations technologies for casinos operated by Paradise Entertainment, announced in January that it planned to introduce a new “Jackpot Series” slot machine game in Macau in the first quarter of this year.
As a reaction to the Covid-19 crisis, Paradise Entertainment announced some progress in diversifying its company through “procurement services” within mainland China “for overseas customers” in its 2020 results. Via this method, it was able to generate a positive EBITDA of HKD53.9 million.
Mr Chun claimed that the organisation will work hard to find potential business prospects in Macau and other countries.