Int Ent warns annual loss could widen to US$64mln on convertible-note fair-value hit
Hong Kong-listed International Entertainment Corp says it expects its loss attributable to shareholders to widen to approximately HKD500 million (US$63.8 million) for the 12 months to June 30, despite growth in gross profit driven by its gaming operations. The forecast compares with a loss attribut…
Hong Kong-listed International Entertainment Corp says it expects its loss attributable to shareholders to widen to approximately HKD500 million (US$63.8 million) for the 12 months to June 30, despite growth in gross profit driven by its gaming operations. The forecast compares with a loss attributable to owners of the company of approximately HKD282.1 million in the preceding financial year, according to a Friday filing. International Entertainment controls the Manila Bay casino hotel in the Philippines formerly known as New Coast Hotel Manila, now promoted as LaVie Resort & Casino Manila. The company said the anticipated annual loss was mainly due to a non-cash loss of approximately HKD425 million arising from a change in the fair value of financial liabilities linked to HKD1.60 billion in convertible notes issued during the reporting period. The convertible notes were subscribed to by Philippines-listed online gaming operator DigiPlus Interactive Corp. If fully converted, they would give DigiPlus a 53.89-percent stake in International Entertainment, based on the latter’s enlarged share capital. International Entertainment said the HKD425-million charge was a “non-cash accounting item” and had no impact on the group’s normal business operations or operating cash flow. Excluding that item, International Entertainment said it would be expected to record a reduced loss attributable to shareholders compared with the previous financial year. The company nevertheless said its selling and marketing expenses had increased during the financial year, primarily due to higher spending on marketing campaigns and promotional activities intended to improve the “attractiveness and competitiveness” of its casino offerings. International Entertainment noted that the expected loss came despite “notable growth in gross profit” resulting from higher gaming revenue from its land-based casino operation and from providing a gaming platform to other authorised gaming operators. In June, International Entertainment announced a cooperation agreement with Total Gamezone Xtreme Inc (TGXI), a unit of DigiPlus, covering the integration, aggregation, provision and operation of online gaming content linked to LaVie Resort & Casino Manila. The arrangement is subject to regulatory requirements. The group has also been upgrading its land-based casino offering. In July, gaming equipment supplier Velvix Corp announced an agreement for an initial deployment of 16 CurlX slot machines at LaVie Resort & Casino Manila.