Rich Goldman Holdings has reported a net loss of HK$81.2 million (US$10.5 million) for the year ended 30 June 2020, down from a profit of HK$91.6 million (US$11.8 million) in the previous year due to reduced visitation to its Hong Kong hotel and reduced revenue from its Macau junket investment.
The Hong Kong-listed firm revealed Wednesday that revenue from the gaming segment fell 70.6% year-on-year to HK$21.8 million (US$2.8 million), impacted by Macau border closures and the cessation of its last remaining cooperation with a junket operator in March 2020.
That operator, Hoi Long Sociedade Unipessoal Limitada, had informed Rich Goldman it would not seek an extension of its collaboration contract to oversee eight VIP tables at Grand Lisboa due to “challenging economic conditions and the recent outbreak of Coronavirus.”
Rich Goldman had previously worked with three junket partners but lost two of those in 2017 when Venetian Macao Limited (VML) terminated promotion agreements with Hao Cai Sociedade Unipessoal Ltd to operate 14 VIP tables at the Venetian and Hou Wan Entertainment Ltd to operate 10 VIP tables at Sands Macao.
Also feeling the COVID-19 pain was Harbour Bay Hotel in Hong Kong, purchased by the group in 2017, which recorded a loss of HK$88.9 million (US$11.5 million) versus a profit of HK$3.7 million (US$477,000) in FY19. A further loss of HK$11.8 million (US$1.5 million) was recorded by the property leasing business, which looks after the leasing of shops on the ground floor of Harbour Bay Hotel.
Rich Goldman said its 2020 financials were the result of a “challenging year amid the worsening business environment as a result of several adverse factors,” including social unrest in Hong Kong in the second half of 2019, the global coronavirus pandemic and the slowing of China’s economic growth.
“Furthermore, the Group’s Gaming and Entertainment Business was in a transitional period from Macau to the Philippines this year,” it said.
“The cessation of business in Macau and the delay of commencement of new business have caused significant reduction of revenue from this segment.
“As a result of above factors, the Group recorded significant decline in the Gaming and Entertaining Business and hotel operations business and the impairment loss on its hotel property as well.
“Amid the great uncertainty over the pandemic and recovery of economy, the Group will continue to focus on its established diversification strategy.”
Rich Goldman said it plans to, “Expedite the gaming business setup in the Philippines; further expand existing money lending business by incorporation of fintech elements into the traditional business model; actively explore the market opportunities to strengthen our property leasing business; and broaden the business scope of our hotel operations to property management.”