Iao Kun Group swings to Q3 loss

Iao Kun Group Holdings, which operates VIP rooms in Macau, swung to a loss in Q3, but the result still beat most analysts’ expectations.
The company said its non-GAAP loss was $0.02 per share compared to a profit of $0.16 a year earlier. Analysts polled by Capital IQ had expected a loss of $0.11 per share. Revenue fell 15 percent to $51.9 million, missing the $56.8 million consensus estimate.
The net loss attributable to ordinary shareholders was $12.2 million or $0.20 per diluted share, down from a profit of $6.9 million or $0.11 a year ago. The loss included a change in fair value contingent consideration of $7.0 million related to the King's Gaming, Bao Li Gaming and Oriental VIP Room acquisitions.
Rolling chip turnover rose 5 percent in the quarter to $4.3 billion. But the company cut its 2014 rolling chip guidance to between $16.8 billion and $17.5 billion from the previous guidance between $17 billion and $19 billion.
Sterne Agee in a note said the cut to rolling chip guidance was not surprising and said the company still appears to be performing better than its peers.
The 5 percent gain in Q3 rolling chip volume compared with a decline of 19 percent for the market as a whole, it said.
“We believe market share gains will continue due to stronger capital management than peers; lack of reliance for outside funding/liquidity sources; and the continuation of its cash agent acquisition program,” it said.
The company still expects to complete its dual listing on the Hong Kong Stock Exchange by the end of this year, or early next. The shares are currently traded on the U.S. Nasdaq Exchange.