Indian casino operator Delta Corp has seen a steep decline in revenue and net profits during the second quarter of this year, when compared to the same period of last year, primarily driven by a slowdown in gaming operations.
Total revenue reached Rs1.81 billion ($21.55 million) in the second quarter of 2024, down by 30.3 percent from Rs2.59 billion ($30.92 million) in the same period of last year, primarily driven by a slowdown in gaming operations.
In line with the revenue decline, Delta Corp’s consolidated net profit saw a steep 55.3 percent fall. For the quarter ended June 2024, the company reported a net profit of Rs0.22 billion ($3.62 million), significantly lower than the Rs0.72 billion ($8.10 million) recorded in the same quarter of the previous year.
Despite efforts to control costs, including reductions in finance expenses and other operational costs, the decline in core gaming revenues has heavily impacted the company’s overall profitability.
Amongst the revenue shortfall, Delta Corp implemented some cost controls, managing to reduce its total expenses by 8.9 percent, to Rs1.65 billion ($19.72 million) in 2Q24.
Employee benefits, finance costs, and other expenses were part of this reduction effort, but it was not enough to offset the sharp drop in income from operations.
This reduction in revenue was primarily attributed to reduced revenues across its gaming and hospitality segments, with the group’s 2023/2024 report also pointing to the sale of the company’s Nepal unit, and the temporary docking of the Deltin JAQK casino vessel for five weeks.
The company’s auditor has drawn attention to a note in the financial statements regarding uncertainties related to show cause notices received by the company and three of its subsidiaries for alleged short payment of the Goods and Service Tax (GST) amounting to Rs23.2 billion ($277 million) for the period from July 1st, 2017 to November 30th, 2022.
“FY 2023-24 was a challenging year and will be fixed in our memories as a year of situations beyond our control. In these unprecedented times, we managed to resist, we fought with fortitude and grit and embarked on a consolidation and expansion mode within the organization”, CEO Jaydev Mody says in the group’s 2023/2024 financial year report.
“Although the financial year was extremely trying for our company and the industry, our operational projects provided us with ongoing momentum to move ahead with determination and to be resourceful and inventive.”
Delta Corp Limited operates some of the largest offshore casinos in India, including Deltin Royale, Deltin JAQK, and Kings Casino. The company also owns and operates Deltin Suites, a 106-room all-suite hotel with a casino in Goa, as well as Casino Deltin Denzong at the Denzong Regency Hotel in Gangtok, Sikkim.
In addition, Delta Corp owns and operates The Deltin, a 176-room five-star hotel in Daman that is an integrated resort with a proposed casino. The company also owns and operates the online poker site Adda52.com and the online rummy site Adda52rummy.com.
Looking forward, Delta Corp underlined as a major highlight the upcoming launch of a new offshore casino vessel, scheduled for the final quarter of the 2024-25 fiscal year.
This vessel, set to double Delta’s gaming capacity from 2,000 to 4,000 gaming positions, is expected to significantly enhance revenue streams as tourism in Goa continues to rise.
Delta Corp aims to further solidify its leadership in the casino gaming space, with an estimated capital expenditure of Rs3.5 billion dedicated to expanding its casino portfolio
In addition to its casino operations, Delta Corp is making strategic moves in the hospitality sector.
A 450-room hotel is under construction in Goa, with an investment of Rs4.5 billion ($53.6 million). This hotel, expected to be the largest in Goa upon its completion in FY 2025-26, will complement the newly expanded gaming facilities.
Another strategic initiative by Delta Corp is its diversification into real estate, with the company having established a real estate development platform in collaboration with Alpha Alternatives Fund Advisors LLP and Peninsula Land.
This fund, with a total value of Rs7.6 billion ($90.6 million), will focus on residential redevelopment projects and land parcels around the Mumbai Metropolitan Region, Pune, and nearby areas. Delta’s investment in the platform amounts to Rs900 million ($10.7 million), representing an 11.76 percent stake.
