Sunday, August 14, 2022

Iao Kun Group swings to profit in Q4, but issues weak 2015 VIP guidance

Iao Kun Group Holding, a junket room operator, reported it swung to a Q4 profit as revenue increased and expenses fell.

The company posted a net profit of $5.7 million, or $0.09 per share, compared with a year-earlier net loss of $5.5 million, or $0.09 per share. Excluding one-time items, the company earned $0.13 per share in the latest quarter, versus a loss of $0.06 per share in the prior-year period. No analyst estimates were available for comparison via Capital IQ.

Total revenue climbed to $52.3 million from $50.2 million a year earlier. Just one analyst polled by Capital IQ had given a revenue estimate, which was $49.2 million.

Total expenses declined to $48.4 million from $57.8 million, including a drop in the commission to agents to $36.8 million from $46.9 million.

The company said its revenue growth was primarily due to a win rate of 3.95 percent for the quarter, up from a win rate of 2.39 percent for Q4 2013. The win rate increase was partially offset by slower revenue growth of VIP baccarat, consistent with the overall decline of gaming revenue in Macau, and "the economic downturn and tightening of credit in mainland China, from where the majority of its VIP gaming patrons reside," the company added.

Rolling Chip Turnover, a metric used by casinos to measure the aggregate amount of players' bets and overall volume of VIP gaming room business transacted, fell 34 percent to $2.9 billion.

"In the fourth quarter, we experienced a win rate above the statistical average, which more than offset the impact of the ongoing VIP baccarat volatility and our Rolling Chip Turnover decline from the prior-year quarter," said chairman Man Pou Lam.

For the first two months of 2015, the company’s Rolling Chip Turnover was $1.44 billion, or an average of $720 million per month, down 52 percent year-over-year.

The company provided 2015 Rolling Chip Turnover guidance for its five existing VIP rooms in Macau of between $8.5 billion and $10.0 billion, well below the $16.6 billion it recorded in 2014.

Asia Gaming Brief is a news and intelligence service providing up to date market information for worldwide executives on relevant gaming issues in Asia.

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