Russian gaming operator Summit Ascent recorded gaming revenue of HK$167 million ($21 million) in 1H23, which remained flat year-over-year. The company returned to recording losses during the period, with a loss attributable to owners of HK$16.1 million ($2.1 million) in 1H23, compared to a profit attributable to owners of HK$85.2 million ($10.9 million) in 1H22.
According to interim financial results released on Tuesday, the loss in 1H23 was primarily due to the recognition of exchange losses amounting to approximately HK$35.2 million ($4.5 million), resulting from the fluctuation of the Russian Ruble exchange rate. In contrast, exchange gains of approximately HK$157.1 million ($20 million) were recognized in 1H22.
The company’s total revenue for the same period reached HK$182 million ($23.2 million), reflecting a 2.3 percent increase compared to HK$177.9 million ($22.7 million) in 1H22. The management attributed this revenue growth predominantly to a robust domestic market in the Russian Federation.
The operator of the Russian integrated resorts, Tigre de Cristal resort, noted a 5 percent decline in its adjusted EBITDA, falling from HK$60 million in 1H22 to HK$57 million ($7.3 million) in 1H23.
The company acknowledges that Tigre de Cristal, situated in the Russian Far East, has commendably sustained a robust domestic business operation and remains the key revenue generator for the company in the first half of 2023.
Tigre de Cristal has strongly established its reputation in the industry as a beloved integrated resort among Russians, even in the midst of current economic uncertainties. With local business trending upward, the near-term outlook from the Russian community for the resort appears promising.
The significant decline in the number of inbound tourist arrivals in the Russian Federation, attributed to geopolitical tensions, has been unprecedented. We have taken proactive measures to mitigate the impact on company operations. Under these circumstances, the firm has been actively seeking strategic local partners who could contribute value to the operation of the integrated resort.
Raising ownership Stake in the Manila Casino
Summit Ascent‘s fellow subsidiary, Suntrust Resort Holdings, operates as a casino and hotel developer in Manila. The group, along with its subsidiaries, is actively involved in the development of the Westside City Project integrated resort in Manila. The main hotel casino will feature entertainment amenities and a five-star hotel with over 450 rooms. Moreover, the group is engaged in the development of the Westside shopping mall, an opera house, and a 2,000-room hotel complex.
In July, Summit Ascent announced a new share agreement with its Philippine partner company, Suntrust Resort Holdings, valued at $246.85 million. This strategic step was taken, in part, to offset the interest owed by Suntrust to various bondholders, a factor that could potentially discourage additional investments in the company.
As per the most recent update, the Main Hotel Casino is currently under construction and not yet operational. Up until June 30, 2023, Suntrust has invested approximately $461.1 million in the Main Hotel Casino project, which constitutes about 42 percent of the estimated total construction and development costs.