The company behind the Tigre De Cristal casino resort in Russia’s Primorsky Krai region, Summit Ascent Holdings Limited, has released its consolidated financial results for the six months to the end of June showing a net profit of just over $219,100.
Hong Kong-listed Summit Ascent Holdings Limited finished the same period last year in the red to the tune of $5.6 million but declared that “phenomenal month-on-month growth” from the Asian VIP gaming sector has seen it post six-month earnings before interest, tax, depreciation and amortization of $4.5 million.
“Our rolling chip business targeting the Asian VIP market has seen phenomenal month-on-month growth, vindicating our investment thesis that Primorsky Krai is an ideal location to capture the significantly underserved gaming demand in northeast Asia,” read a statement from Summit Ascent Holdings Limited, which holds 60% of Tigre De Cristal owner G1 Entertainment followed by Taiwanese gaming device manufacturer Firich Entertainment and local Russian entities. “Our strategy has been to start our rolling chip business using only casual junkets initially without fixed-room operators. This strategy is deemed necessary in order to preserve the bargaining power of the casino vis-a-vis fixed-room operators. Thus far, our strategy has been proven to be correct. This is evidenced by the fact that rolling chip turnover has been increasing on a month-on-month basis since the commencement of business in November last year and dramatically increased following the start of two fixed-room operators in late June of 2016.”
Summit Ascent Holdings Limited, in which Melco Crown Entertainment boss Lawrence Ho serves as the majority stakeholder, declared that rolling chip turnover at Tigre De Cristal rose from $33.2 million in its first month of operation in November to $257.8 million in July before again swelling to $283.6 million for August.
The government of Russia does not impose limits on the numbers of gaming tables or slot machines a casino may operate. As such, Summit Ascent Holdings Limited stated that the 36,000 sq ft casino at the 121-room Tigre De Cristal is “at liberty to adjust its gaming capacities according to business needs”.
However, Summit Ascent Holdings Limited revealed that the mass-market table gaming business at Tigre De Cristal has been “relatively disappointing” and brought in only $39 million in August drop after peaking at $57.7 million in December with 40% of this coming from a select band of local customers.
In terms of slots, Summit Ascent Holdings Limited declared that Tigre De Cristal handle hit $180.5 million in June after hovering around the $128.9 million-mark for most of the year before finishing August at just below $154.7 million.
“While the ramp-up of the local market has thus far been constrained by the weakness in the Russian economy, we remain sanguine on its growth potential as we have witnessed the tremendous efforts made by the Russian federal government and the Primorye provincial government to encourage the growth of tourism and business investment in the region [such as] the Vladivostok Free Port Initiative, additional direct flights [and] significant growth in tourist visitation from neighboring Asian countries,” read the statement from Summit Ascent Holdings Limited. “Further improvements in the local economy from the aforementioned efforts may assist in more growth in our mass business.”