The scandal-stricken junket operator Suncity Group reported a net loss of HK $ 646.2 million (£ 62.8 million / 74.0 million euros / 82.6 million US dollars) in 2021 and then “a group that survives as a going concern. There is serious doubt about his ability. “
This loss was in stark contrast to the HK $ 1.27 billion profit of the previous year.
Revenue for the 12 months to December 31 was $ 340.4 million, an increase of 87.0% from $ 181.9 million in the previous year.
Games and hotel operations accounted for $ 248.4 million in total revenue, mall operating revenues of $ 40.9 million, hotel operating revenues of $ 17.2 million, and consultant revenues of $ 3.3 million.
Cost of sales increased 61.8% to $ 250.3 million and gross profit increased 231.3% from $ 27.2 million in 2020 to $ 90.1 million. Higher costs elsewhere far outpaced revenue growth.
Management costs proved to be a major expense of $ 269.7 million, and Suncity also reported an impairment loss of $ 287.1 million on property, plant and equipment.
The additional cost of $ 119.7 million was not associated with an impairment loss on equity loans to the joint venture and an impairment loss on loans to the joint venture of $ 194.2 million. A loss of $ 438 million was also associated with the joint venture, with annual financial costs reaching $ 283.9 million.
This resulted in a loss of $ 623.1 million before tax. This is in stark contrast to the $ 1.27 billion profit recorded at the end of 2020.
Sun City also paid $ 23.1 million in taxes. This resulted in a net loss of $ 646.2 million from continuing operations. This is more than a full-year loss compared to a net profit of $ 1.27 billion in the previous year. Forecast earlier this month..
The company has $ 823.1 million in debt within a year, including tomorrow (March 31) $ 366.9 million, $ 220.2 million at the end of next month, and HK $ 303 million to affiliates. I pointed out that I owe it.
As a result, “these situations indicate the existence of significant uncertainty that could raise serious doubts about the Group’s ability to survive as a going concern.”
“The Board of Directors has taken steps to improve the Group’s liquidity and financial position, refinancing its business and restructuring its debt,” he added.
As a result of its financial position, the Group has already begun negotiations on the sale of certain assets it holds, including land owned in Japan. We also negotiated with creditors about delays in repayment of loans.
We will also pursue further cost reductions and equity finance as necessary.
This loss was due to revenues from HK $ 123.8 million from Suncity’s core junket business, down from HK $ 123.8 million in 2020 to HK $ 42.8 million in 2021, a significant decrease from 2019 due to travel restrictions. Arrest of group chairman Alvin Chow..
Chau, who has since resigned from his position in Sun City, has been accused of running an illegal online betting ring.
Suncity claimed that in addition to the initial earnings renewal, Gold Yield Enterprises failed to repay the US $ 30 million loan. Gold Yield Enterprise is a joint venture between Suncity’s Star Admiral subsidiary and the investment trust Alpha Era.
At the time of the loan, Sun City said Star Admiral and the Alpha era together owned a 67% stake in Vietnam’s Huiana Resort.
Suncity and Alpha Era lent this money to Gold Yield last year to develop Hoiana. Sun City claims that the loan was paid on February 28, but has not been repaid. As a result, Gold Yield Enterprise defaulted to US $ 34.9 million against Suncity, including interest. He added that it would have borrowed the same amount during the Alpha era.
Sun City itself was subject to a default claim for the loan after Chau’s arrest, as the unnamed lender claimed that Chau had. Default Debt of HK $ 313.6 million. As a result, Suncity He warned that the business could be seized by creditors.
