Hong Kong-listed International Entertainment Corp (IEC) has reported approximately HK$42.2 million ($5.3 million) in losses in the second half of last year, almost doubling its losses recorded in the same six-month period in the previous year.
This loss expansion happened despite an uptick in revenue from the group’s operations, which saw a boost of approximately HK$11 million ($1.4 million).
This uptick is attributed to the recovery of the gaming industry in the Philippines following the reopening of international borders and the lifting of capacity restrictions and lockdowns in the first half of 2022.
IEC recorded revenue from the hotel operation for the second half of 2023 of approximately HK$34.1 million ($4.3 million), almost unchanged from the previous year.
Additionally, a fair value gain of approximately HK$7.1 million ($907,725) in investment properties was recorded during the period, compared to a fair value loss of approximately HK$16 million ($2 million) in the previous period. This gain reflects improved expected future cash flow.
However, the company also faced increased general and administrative expenses, which almost doubled to HK$80.4 million ($10.2 million). These expenses include legal and professional fees, staff costs, and other expenditures incurred in preparation for operating and managing the casino under the Provisional License granted on September 27, 2023.
On 27 September 2023, the group’s as licensee and PAGCOR as licensor entered into a provisional license agreement to establish and operate a casino and the development of an integrated resort in the City of Manila.
Based on the agreement with PAGCOR revealed via filing earlier, International Entertainment’s IR project shall have a total gross floor area of at least 250,000 square meters, and a total investment commitment of no less than $1 billion.
The total investment commitment comprises land acquisition costs, costs related to securing development rights, construction, equipment, development costs, financing costs and all other expenses directly related to the completion of the project.
The key concept components of the proposal approved by PAGCOR comprise a hotel with approximately 800 5-star luxury hotel rooms, a casino, restaurants, leisure facilities, and shopping arcades.
A bank loan of approximately HK$608.9 million ($77.8 million) was obtained by IEC in the last six months of last year to finance the funding need for developing, operating and managing of the casino.
One of the reasons was due to the deposit of US$50 million into the Escrow Account in accordance with the requirement of the Provisional License granted on 27 September 2023.
Other losses of the Group mainly represented net foreign exchange loss. The Group
recorded a net loss of approximately HK$12 million ($9.9 million) for the Period as compared to approximately less than HK$0.1 million in the previous Period.
