The LET Group has issued a profit warning for the first half of the year, noting that it expects to record a loss for the period, reversing a profit of HK$450.6 million ($57.8 million) seen in 1H23.
In a stock exchange filing on Monday, the group did not indicate exactly how much the loss is expected to total, however it specified net exchange losses of ‘approximately HK$179.2 million ($22.98 million)’ during the six-month period.
It also indicated that it had not seen a reversal on impairment losses on ‘equity loans, loans to and amounts due from a joint venture’. The largest of the group’s current joint ventures is the Westside City project in Entertainment City, a $1.1 billion five-star hotel and casino being operated under a lease agreement with a subsidiary of Newport World Resorts operator Travellers International Hotel Group (under the Alliance Global Group – AGI).
The developer of the project, an LET subsidiary, Suntrust Resort Holdings earlier this month announced a net loss of PHP555.51 million ($9.68 million) for the second quarter of the year.
The LET Group’s 1H24 results were however boosted by a share of profit from a joint venture ‘of approximately HK$234.3 million’, a strong increase from HK$124.1 million ($15.79 million) recorded in 1H23 ‘due to reversal of share of loss of a joint venture recognized in prior years’.
A separate filing by LET subsidiary Summit Ascent, operator of the Tigre de Cristal casino in Russia, indicated that the group was expecting to record a profit of approximately HK$5.8 million ($744,000) for 1H24, reversing a loss of HK$16.1 million ($2.06 million) in 1H23.
This was bolstered by an increase from gaming and hotel revenue of 4 percent, to HK$189.9 million ($24.36 million), ‘due to the outstanding performance in mass tables’.
The group also reduced its exchange losses by 37 percent yearly, to HK$22 million ($2.82 million), as the Russian Ruble stabilized. It also saw a decrease in depreciation and amortization of 26 percent, to HK$29.5 million ($3.78 million) for 1H23.
The LET Group recently approved the disposal of its Russian assets, including the Tigre de Cristal casino in an extraordinary general meeting of its board. This follows a failed sale of the assets to a Russian firm which saw the majority of directors of LET Group and Summit Ascent resign in opposition to the sale.
The deal is expected to be worth not less than $92.8 million.
