Hong Kong-listed International Entertainment Corp (IEC) has issued a profit warning, anticipating a loss of at least HK$135 million ($17.32 million) for the financial year ending 30 June 2024. This forecast is based on the preliminary review of the unaudited consolidated management accounts for the first half of 2024.
The expected loss is primarily attributed to increased general and administrative expenses, totaling HK$126.8 million. Key contributors to these expenses include:
- One-time expenses of approximately HK$40.9 million for a provisional license from the Philippine Amusement and Gaming Corporation (PAGCOR) to establish and operate a casino in Manila;
- An increase in interest rates for borrowing, amounting to about HK$37.4 million, related to the casino license and establishment;
Despite these challenges, the group expects a revenue increase of HK$15.3 million, or 7.4% year-over-year. However, the revenue from the gaming operation segment, which commenced after receiving the provisional license on 9 May 2024, has not yet been fully realized for an entire year.
The provisional license is seen as a significant milestone, enabling IEC to independently operate and manage casino and gaming activities. This development is expected to boost future earnings and potential for the company.
A board meeting is scheduled for 16 September 2024 to further discuss and finalize IEC’s actual financial review for 2024. In May 2024, IEC received the provisional license to operate New Coast Hotel in Manila, Philippines, with plans to convert the hotel into a fully-fledged integrated resort.
IEC also owns L’Arc Macau, where an ex-junket manager embezzled about HK$100 million in 2006.
| Key Financial Highlights | Amount (HK$) |
|---|---|
| Expected Loss for FY 2024 | ≥ 135 million |
| Increased General and Administrative Expenses | 126.8 million |
| One-time Expenses for Provisional License | ≈ 40.9 million |
| Interest Rate Increase for Borrowing | ≈ 37.4 million |
| Revenue Increase | 15.3 million (7.4% year-over-year) |
