With profits up 9% deadbeats drag down Imperial Pacific bottom line
Imperial Pacific Holdings International (IPI) wrapped up the first half of 2017 with gross profits more than two-fold what they were for the same period in 2016. However, operating expenses mainly attributable to bad debt also increased by 208%.
The company opened their new casino within the Imperial Pacific Resort in Garapan, Saipan on July 6. IPI ceased operations of the Best Sunshine Live temporary casino in a high-end shopping mall on the same day. Net profits for the company were up nearly 9% at HKD912.0 million (US$116.6 million) for the six-month period ending June 30.
The numbers in the interim report relate only to the temporary casino’s operations. The transfer of gaming assets has allowed the company to increase capacity from 48 tables and 141 slot machines at the Best Sunshine Live to 76 tables and 184 slot machines at the present facility which has room for 193 tables and 365 slot machines. The balance of tables and slots is expected to be operational when Imperial Pacific Resort is completed in 2018. Unlike Macau, Saipan does not set a table limit on operators. IPI holds the only casino license there.
Gross gaming revenue for the temporary casino increased year over year 83% to HKD7.3 billion offsetting the losses brought on by credit customers who did not pay their bills. The VIP tables at Best Sunshine Live historically outperformed tables anywhere else in the world with only 16 tables responsible for the USD$938,972,923 GGR or an average of nearly US$60 million each for the period. Rolling chip volume, the amount VIPs bet at the baccarat tables, exceeded $25 billion for the first half of the year. Mass gaming was up about 22% and slot machines generated another 27.5% increase in revenues at the former facility.
Earlier this year the company said: “A significant portion of our VIP casino customers is sourced through the group’s own marketing avenues.” A report on G3Newswire this week quoted the company: “Such high-spending VIP players generally receive commission and allowances based on a percentage of the rolling chip turnover. The Group’s VIP players are also brought to us via intensive marketing campaigns. VIP gaming operations also include premium mass gaming operations that do not receive commissions from the Group. In addition, a minor operation of the Group’s VIP customers has been sourced via a new licensed junket operator since August 2016. The establishment of a new licensed junket incentive allowed the Group to bring in new players which mitigated the Group’s credit concerns. Geographically, most of our direct VIP patrons are from China, Hong Kong, Macau, Korea and Saipan.”
The company said they expect to broaden their customer base and open more VIP rooms before the end of this year. Once that occurs, they expect to work with additional junket operators once they pass the stringent Saipanese licensing requirements. IPI pointed to the low tax rates on Saipan as incentives to promoters and noted that accommodations for VIP players include “three villas and five yachts [as well as] as hotel rooms secured from local high quality hotels to better provide accommodations to our VIP customers.”