Jimei International Entertainment Group, a Hong Kong-listed casino junket investor that promotes at least seven gaming tables in NagaWorld casino in Phnom Penh, reported a steep decline in profit during the first half of 2016 despite increased turnover.
The company’s net profit plummeted to HKD28.6 million ($3.7 million) during the first six months of the year, down by 46 per cent compared to the same period a year earlier. Meanwhile, revenue rose to HKD132.7 million ($17.1 million) during the first half, an 18 per cent year-on-year increase.
The lower earnings were mainly attributable to increased finance costs, Jimei said in a filing to the Hong Kong Stock Exchange on Friday, adding that these costs grew ten-fold to HKD32.1 million ($4.1 million) during the first half of 2016 from a year earlier.
“Other factors affecting the amount of profits for the period includes the impairment loss on trade and other receivables . . . and the gain on change in fair value of derivative financial liabilities,” it said.
Jimei has pushed heavily into the entertainment and gaming business since Macau-based veteran junket investor Jack Lam and his associates assumed a controlling interest in late 2014.
Last year, it entered into junket arrangements with the Crown Perth and The Star casinos in Australia and NagaWorld casino in Cambodia.
The company said it would continue to explore the possibility of further extending its business.
“In the long run, it is the group’s intention to diversify its business activities,” it said.
Jimei also reported entering a framework agreement with two independent third parties in March 2016 to develop a new project in Cambodia.
Through a joint venture with one of the independent parties, the company will develop “an entertainment complex, including property, hotel, golf course, theme park and other entertainment and tourism business”, Jimei added.
The other independent party will provide engineering, construction and consultancy services to the joint venture company.
While Jimei did not disclose the names of the parties or location of the project, it is likely a reference to the company’s partnership with Chinese-owned Yeejia Tourism Development Co Ltd to develop its Gold Silver Gulf resort project near Sihanoukville.
The massive coastal resort is already under construction on 3,300 hectares inside Ream National Park.Jimei has not publicly disclosed whether the $5 billion resort will host a casino.