Iao Kun 15Q1 profit, revenue tumble, but not as much as expected

Iao Kun Group Holding Company (IKGH), a promoter of VIP rooms in Macau, posted a steep drop in Q1 revenue and adjusted income, as China's anti-corruption drive hit spending by high rollers, though the results were better than expected.

On a non-GAAP basis, net income was $8.1 million, or $0.13 per share compared to $17.9 million, or $0.29 per share, beating expectations for $0.12, according to Capital IQ.

Net income was $17.1 million, or $0.28 per share, compared to net income of $3.2 million, or $0.05 per share in the same period a year ago.

Revenue fell 48 percent to $41.7 million, dragged down by a 54 percent plunge in rolling chip volume to $2.2 billion. The figure was just ahead of estimates for $41 million.

The company said it's cutting its full-year rolling chip forecast to between $7.0 billion and $8.5 billion, from a previous range of $8.5 billion and $10.0 billion.

"Given the ongoing macro environment in Macau, we expect the overall VIP market will continue to be affected in the near-term, and as such we will continue to prudently manage our capital," said chairman Lam Man Pou. "To that end, we have been actively exploring alternatives to diversify our sources of revenue," he added pointing to a recent deal to begin junket operations in Crown Perth and Crown Melbourne casinos in Australia.

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