South Shore Holdings, the owner of the ultra high-end The 13 hotel in Macau, said its loss for the year to end March increased by about three times due to a gain in impairment losses on hotel assets, hotel operating expenses and depreciation charges.
The loss was HK$5.84 billion ($745 million), while the group recorded total assets of approximately HK$8.35 billion, a drop of 40 percent from the prior year.
The Hong Kong-listed company posted a 38 percent gain in revenue to $9.38 billion, although it recorded minimal income from The 13. Revenue from hotel rooms and food and beverage operations was about $3 million and $2 million respectively, it said.
The average occupancy rate was 8 percent with an average daily rate of about $5,000.
South Shore also expressed doubt about its ability to sell its 51.7 percent stake in the Paul Y Engineering Group. The buyer has made a deposit of about $179 million, but the company said it’s uncertain if it can meet the requirements in the sale contract that would allow it to complete the deal.
If not, South Shore will keep Paul Y, which would provide it with ongoing cash flow, but it would have to return the deposit, it said.
The group said it is seeking additional finance and still believes an investment of $1.5 billion into the company that runs The 13 is still a viable option. South Shore reached a memorandum of understanding with an investor in January and talks are ongoing.
The hotel opened in August last year and still does not have casino operations.