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CR88-p90-business5:SJC-Casino Review 21/1/10 18:03 Page 1
Nevada Gold buys back shares
Casino operator Nevada Gold with venues in Colorado and
Washington state has repurchased 175,000 shares in a private
transaction worth $152,250 (E145,645) or $0.87 each. CEO
Robert Sturges said: “We have felt for some time now that our
stock price does not completely reflect [our] accomplishments.
This transaction represents an opportunistic use of our cash and it
does not materially affect the amount of cash available for
potential acquisitions.”
Amax takes profits hit as revenues tumble
If the commission cap on the cap, and an impairment loss on macroeconomic climate, the man-
junkets in Macau is
its 49.9 per cent share of Greek agement will continue to work
popular with casino
Mythology Casino. The company closely with the casino and junket
termed the write-downs “prudent” partners to maintain mutually ben-
operators, it’s an entirely
in order to curb future amortisa- eficial relationships.”
different story for the
tion costs. The company has a contract to
junket operators who
Nevertheless the company saw a operate junkets to the Melco
massive reduction in junket rev- Crown property Altira Macau, a
have seen their revenues
enues in the period, even before high-end casino that suffered par-
contract anyway because the cap came into effect. They were ticularly from the visa restrictions
of lower VIP activity.
down 66.5 per cent to just under that stopped many Chinese high-
Amax is one of the
HK$90m (E8m). rollers enter the SAR. When the
In its statement, the company relationship began, it was credited
biggest and one of the said: “The junket related operation with helping the casino rise above
worst affected.
of AMA International Limited has the competition.
contributed greatly to the group’s Amax’s minority stake in Greek
success in the past. However with Mythology, which has around 100
changes in Macau laws governing mass-market table, 16 VIP tables
ImpairedPerformance the gaming industry…the group and 90 slot machines, is accounted
AMAX HOLDINGS expects negative impact on the for as an associated company.
future revenue of the business.” Amax’s share of the casino’s net
A fall in revenues of two-thirds com- It continued: “Although the profit for the period was just under
bined with non-cash write-downs junket related operation has been HK$2m (E175,000), back from a
in anticipation of the effect of the affected by external factors such as loss in the prior accounting period
cap on junket commissions in regulatory changes, fierce market of HK$26.8m (E2.4m).
Macau of 1.25 per cent has pushed competition and also the tough The company added: “[In] an
Amax Holdings deep into the red effort [to diversify] Amax’s hold-
in its first half. ings [and] hence bolster stability,
For the six months ended 30 Sep- the management is always looking
tember 2009, the company for investment opportunities. The
reported a massive net loss of group is ready to step up efforts to
HK$1,19bn (E105.9m) overturn- explore different means and
ing a net profit from a year previ-
The Altira Macau, where the
junket operation is run by
avenues for sustaining and improv-
ously of HK$245.2m (E21.8m). The
Amax but which has provided
ing its performance [despite] the
loss was entirely due to a write-
disappointing revenues for the
dramatic change in the operational
down of an “available-for-sale finan- company in the first half circumstances of the junket related
cial asset”, revalued in the light of operation.”
Gala Coral still looking
Dore shortens
for debt rescue
losses with
added junkets
delayedgratification available cash still further. In November, American
GALA CORAL Despite pumping in £125m private equity investor Black-
(E139m) in April 2008, the stone offered £300m hiddenprofits
UK casino operator Gala current private equity owners (E333.3m) in exchange for DORE HOLDINGS
Coral, which also runs bingo Permira, Cinven and Can- between 40 and 60 per cent of
halls and licensed betting dover are set to lose control of the equity. Then just before The parent company of junket operations
offices, have delayed a deci- the company as the board has Christmas Apollo Manage- at Venetian Macau and at Wynn Macau, Dore
sion about a future ownership put forward a plan to convert ment offered senior lenders Holdings, has reported losses shortened by
of the company into the new £540m (E600m) of debt owed £250m (E277.7m) for 50 per almost a third in the half year to 30 Septem-
year after bids from rival to creditors such as Interme- cent of the company with the ber compared to a year earlier, despite sig-
investors needed more time diate Capital and Park Square other 50 per cent being given nificant non-cash charges incurred for
Dore acquired the Joli
junket at Wynn Macau
for consideration. into 50 per cent of the to junior lenders. repaying debt early.
in the second half of
The leveraged buy-out of company’s equity in order to Apollo has a good case The company saw revenues rise by 34.6
last year, boosting its
Gala Coral five years ago left satisfy a debt repayment. The being a partner in the private per cent to HK$263.2m (E23.4m) - due to revenues significantly
the company with a debt of board’s plan would also see equity consortium that took the contribution from Joli, the junket oper-
despite the downturn
£2.6bn (E2.89bn) to service, another £500m (E555.5m) in over the world’s largest casino ation at Wynn Macau, which it acquired in
which has proven difficult debt repaid over three years operator, Harrah’s. However, the second half of the last financial year. As
since the smoking ban and has the support of many many analysts believe that the group’s revenues are derived from the The impairment losses, which amounted
punched a hole in bingo rev- existing lenders. once the discussions have sharing of profit streams from its invest- to just over HK$1.1m (about E99,000),
enues in particular and higher However that proposal been completed, it will be the ments in gaming and entertainment busi- were due to the inability to achieve the
gaming taxes reduced the now has some competition. board’s plan that wins out. ness in Macau, there is no cost directly sales forecast and to the downturn in the
associated with the revenues, offering a Macau gaming sector, said the company.
100 per cent margin.The compan y managed
Despite the debt issue,
there is plenty of
to push its administrative costs down more
competition for Gala Coral
than 48 per cent to HK$4.4m (E394,000).
Dore said in a statement: “Even though
there is a positive contribution of profit
streams from various junkets acquired, the
group’s net figure still resulted in a net loss
position…Similar to the annual result of
2008/9, the net loss was a result of non-cash
impairment – a net profit before non-cash
items of approximate HK$261.5m
(E23.3m) is a better reflection of the group’s
actual operational result.”
90 February 2010 • businessnews
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