Hong Kong-listed Summit Ascent Holdings said overnight that it may consider seeking “strategic local partners” to operate its Russian integrated resort, Tigre de Cristal, as a result of challenges brought about by the ongoing war in Ukraine.
The update, which formed part of the group’s FY22 results announcement, comes after Summit Ascent was forced to suspend development of its Tigre de Cristal Phase 2 expansion in March 2022 due to uncertainty around the conflict and its impact on inbound tourism.
Despite this, Summit Ascent still managed to turn a profit attributable to owners of the company of HK$11.8 million (US$1.5 million) in 2022, reversing a HK$230 million (US$29.3 million) loss in 2021 after reopening its doors post-COVID and switching its focus to the local Russian market instead.
But the group also said overnight that it continues to take a conservative approach in regard to Phase 2 due to the changed business environment and a need to generate value for shareholders.
The company has, therefore, been exploring “alternative options, as well as potentially looking for strategic local partners who might be able to bring in value in terms of operating the integrated resort in the Russian Far East.”
Expanding on its efforts to appeal to the local market, Summit Ascent said it adapted its business strategy through 2022 by “sourcing locally, stockpiling certain food and beverage items, and fine-tuning our marketing strategies, services and offering prices.
“Tigre de Cristal recognized the importance of local customers and will continue to build strong relationships with the local community, such as fully supporting local businesses by sourcing from them, organizing well-loved local events for Russians and working towards becoming an active and engaged member of the local community,” it explained.
As a result, gross gaming revenues grew by 40% year-on-year to HK$401.9 million (US$51.2 million) – all of it via the company’s mass market operations given the current absence of rolling chip business. Mass table drop grew by 46% to HK$723 million (US$92.1 million) while EGM volume was up by 39% to HK$4.84 billion (US$617 million).
Adjusted EBITDA of HK$105.1 million (US$13.4 million) compared favorably with Adjusted EBITDA of HK$40.9 million (US$5.2 million) in 2021.
“Overall, we are pleased to witness a full recovery in the local mass table and electronic gaming businesses in 2022,” the company said. “The performance in 2022 has been impressive, given that massive changes in the business environment have evolved, which made operating an integrated resort nothing comparable to the pre-COVID era.”
Summit Ascent holds a 77.5% equity interest in Tigre de Cristal’s operating entity, Oriental Regent, and also receives a management fee income calculated at 3% of total net gaming revenue generated.