GGRAsia – Tiger’s new phase postponed to 2025 amid Russian sanctions
Tiger’s new phase postponed to 2025 amid Russian sanctions
The main backer of Tigre de Cristal, a Hong Kong-listed casino in Russia’s Far East, says Phase II ownership (pictured) is postponed until ‘2025 at the earliest’, in due to “the continued negative impact of the Covid-19 Pandemic, in particular restrictions on international travel and economic uncertainties”.
But Summit Ascent Holdings Ltd added in its annual report, filed with the Hong Kong Stock Exchange on Tuesday, that what it called “increasingly aggressive economic sanctions against the Russian Federation” by the United States, the European Union and allied countries, due to the Russian-Ukrainian conflict could also affect capital investments in Crystal Tiger.
Summit Ascent had said in its last interim report, published on September 15, that Phase II was to be “ready in 2023”.
Summit Ascent said in its annual report that Tigre de Cristal – in the Primorye Integrated Entertainment Zone (ZEI), near Vladivostok on the country’s Pacific coast – continued to operate and was “self-sustaining without any bank loans”.
But the company added: “We will need to adjust our operations to the reality of a volatile business environment and try to find ways to do business within the new constraints we may face, including, but not limit thereto, the payment platform for new capital investments. for Crystal Tiger Phase II, loan repayment and repatriation of dividends to its parent companies in Hong Kong, settlements with overseas customers, suppliers and service providers, and increased operating costs due to inflation and supply chain disruptions.
Summit Ascent also noted that in the face of economic sanctions against Russia, the country’s currency, the ruble, had “fallen to an all-time low”.
The company added: “As ruble depreciation threatens to fuel inflation, the Bank of Russia has more than doubled its key interest rate to 20% from February 28, 2022.”
As of December 31, Summit Ascent held a 77.5% stake in Crystal Tiger gaming licensee Oriental Regent Ltd. According to the same report, another Hong Kong-listed company – Suncity Group Holdings Ltd – held a 69.66% stake in Summit Ascent. .
On Dec. 1, Summit Ascent said Alvin Chau Cheok Wa, its then chairman and CEO, was stepping down from those positions, “in view of the pending legal proceedings against him.”
In November, Mr. Chau was arrested in Macao on suspicion of having facilitate illegal gambling abroad for Chinese customers.
Gaming, hotel revenue on the rise
Summit Ascent also announced on Tuesday that it fell to a loss of HKD 230.0 million ($29.4 million) in 2021 from a profit of HKD 10.0 million in 2020.
For 2021, revenue from gaming operations actually grew 22.4% year-on-year, to just under HKD 248.4 million.
Revenue from hotel business rose 106.4 percent to HKD 17.1 million.
The improvements were “mainly attributable to local guests, as the number of foreigners visiting our property has decreased significantly after different governments enacted various travel restrictions and quarantine measures for travelers due to the Covid-19 pandemic,” said Summit Ascent.
The company added, “The increase was also partly due to the base effect as, in the second quarter of 2020, Crystal Tiger’s gaming operations were suspended for approximately three months…according to the respective measures recommended. by the Russian government.
In 2021, the group recorded positive adjusted earnings before interest, tax, depreciation and amortization (EBITDA) of HKD 40.9 million, compared to negative adjusted EBITDA of HK$14.7 million in 2020.
The group did not recommend a final dividend for 2021.