Success Universe sees reversal into losses in 1H24

Success Universe Group Limited, an investor in Macau’s Ponte 16, has reported a challenging financial performance for the first half of 2024, marked by a sharp decline in profitability compared to the same period in 2023.

For the six months ending June 30th, 2024, Success Universe Group recorded a revenue of HK$32.5 million ($4.22 million), representing a significant decrease of approximately 52 percent from HK$68.4 million ($8.87 million) during the same period in 2023.

The company faced substantial losses in other areas. A fair value loss of HK$8.6 million ($1.12 million) on investment properties was reported, a stark reversal from a gain of HK$500,000 ($65,000) in the corresponding period last year.
Moreover, a significant fair value loss of HK$38.4 million ($4.98 million) was reported, a drastic shift from HK$105.5 million ($13.69 million) in profits in the first half of 2023.
The company's administrative expenses rose by approximately 11 percent to HK$26 million ($3.38 million), up from HK$23.5 million ($3.05 million) in the first half of 2023.
Additionally, other operating expenses surged to HK$16.3 million ($2.11 million), compared to an income of HK$2 million ($260,000) in the same period last year.
As a result, Success Universe reported a loss from operations of HK$79.6 million ($10.34 million), a dramatic reversal from the HK$94 million ($12.21 million) profit recorded in the first half of 2023.
Ponte 16, the flagship integrated resort of Success Universe Group, was said to have leveraged the resurgence in global tourism to maintain its growth trajectory in 2024.

In the first half of 2024, Macau witnessed a significant uptick in visitor arrivals, with a 44 percent year-on-year increase, reaching approximately 16.7 million visitors, or 82 percent of pre-pandemic levels.

The growth in Macau’s tourism has been bolstered by several government initiatives, including the extension of individual travel endorsements to more cities in mainland China and the introduction of the Hengqin-Macau multiple-entry visa policy.
‘Ponte 16's focus on the mass-market segment aligns with this trend, ensuring its position as a leader in sustainable growth within Macau’s gaming landscape', noted the company.
As of June 30th 2024, the casino of Ponte 16 had 109 gaming tables in operation, consisting of 103 mass tables and six high-limit tables.
The average occupancy rate of Sofitel Macau At Ponte 16 was approximately 85 percent, with about HK$134.7 million ($17.52 million) recorded in adjusted EBITDA for the first half of 2024, a drop of some HK$30 million ($3.8 million) from the same period last year.
Success Universe's property investment segment has also faced headwinds in Hong Kong’s commercial real estate market, primarily due to high interest rates and geopolitical uncertainties.

As a result, the Grade A office vacancy rate climbed to 13.6 percent by mid-2024, with rental prices declining by approximately 2 percent year-on-year. The group reported a segment loss of HK$11.3 million ($1.4 million).
The company's revenue from its travel business segment, via Canadian travel agency Jade Travel Ltd., also dropped 54 percent to approximately HK$31.2 million ($4 million).

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