IPI profit dips due to gambling debts
The profit of Imperial Pacific International Holdings Limited in the first six months of 2018 plunged by almost 50 percent, largely due to uncollectable gambling debts incurred by VIPs and other high rollers that played at Imperial Pacific Resort’s casino.
IPI Holdings is the parent company of Imperial Pacific International (CNMI) LLC, which holds the lone casino license on Saipan. The CNMI Lottery Commission, last Friday, granted IPI an extension to finish the casino-hotel on Feb. 28, 2021.
Based on the unaudited interim results released last Aug. 31 for the first six months of 2018, IPI Holdings recorded revenues of HK$2,214,795,000 or US$282,198,104.93 with the current exchange rate pegged at HK$1 to US$0.13 when trading closed last Friday.
The group still had gross profit earnings of HK$1,953,079,000 (US$248,851,560.78) but was HK$2,134,669,000 (US$271,988,850.63) lower compared to the HK$4,087,748,000 (US$520,840,411.42) it collected in the same period last year.
Their total net profit for the same period in the first six months of this year was HK$78,977,000 or US$10,062,854.46, compared to HK$912,028,000 (US$116,206,047.62) in the second quarter last year.
IPI, almost one week before the release of its financial report, already filed a profit warning announcement with the Hong King Stock Exchange, telling shareholders to expect a decrease in earnings for the six-month period in 2018.
Uncollectable VIP gambling debts contributed largely to the loss in profit as IPI chose to transact and offer direct credit to its VIP customers rather than getting third-party junket operators since they began operations of its casino in 2015.
Gaming news website CalvinAyre said that IPI has written off a total of US$733 million in bad gambling debts, where US$318,537,500 was from 10 VIP clients alone. The $733 million is more than double it wrote off in the same period last year when IPI saw its gross revenues rise to US$933 million. IPI has yet to write off more than US$140.2 million owed by one large debtor.
IPI Holdings’ stock prices closed at HK$0.73 per share last Friday.