South Shore Holdings Ltd, operator of THE 13 hotel in Macau, has announced a loss for the year of HK$5.84 billion (US$747.4 million) – up from a loss of HK$1.57 billion in 2018 and considerably more than the HK$4.70 billion it had predicted in a profit warning last week.
The company didn’t provide any comment or analysis from management but listed a HK$3.40 billion (US$435 million) loss on development of THE 13, HK$1.04 billion on land lease payments, HK$587.1 million on administrative expenses and HK$504.5 million on the cost of sales and services on hotel, F&B and related services as the primary contributors.
Group revenue for the year climbed 38.0% to HK$9.38 billion, almost all of it from South Shore’s construction arm, however the cost of the construction business also grew considerably to HK$8.99 billion. THE 13 itself generated modest income of HK$4.5 million.
THE 13 was billed as the world’s most luxurious hotel when it was first mooted but despite holding a soft opening in August 2018 remains only partially available for private functions due to a number of hotel rooms remaining unfinished. It has also given no indication that it has any immediate plans to apply for a license to operate gaming under a potential “service agreement” arrangement it previously reached with Macau concessionaire Melco Resorts and Entertainment.
South Shore revealed in June that it had sold 24 of its fleet of 30 red Rolls-Royce Phantoms in order to pay down bank loans. The company has also been involved in ongoing discussions since January with “an associate of a substantial shareholder” over a proposed HK$1.5 billion investment into the company subsidiary that beneficially owns THE 13 Hotel.