Golden Resorts counts on high rollers for turnaround

PUBLISHED : Thursday, 20 April, 2006, 12:00am
UPDATED : Thursday, 20 April, 2006, 12:00am

Hotel and casino hall operator Golden Resorts Group expects a healthy bottom line this year when profit from its two hotels can fully reflect on the balance sheet.

Two gaming halls inside the hotels will be the company's main growth driver, according to chief executive Pollyanna Chu.

The company posted a $292.7 million net loss for last year, mainly due to a one-off accounting treatment of a share-based expense of $496.8 million charged to its income statement.

It recorded a net profit of $204 million excluding share-based expense last year, compared with an $11.13 million net loss in 2004.

The company, previously known as watchmaker Medtech Group, took over Grandview Hotel Macau and Casa Real Hotel last year.

Golden Resorts' results for last year only reflected incomes from Grandview for nine months and Casa Real for seven months.

'This year's results will be better because income from the company's two hotels can be fully reflected,' said Mrs Chu, adding that chip turnover for its gaming halls already grew in double digits in the first quarter of this year.

Executive director Hans Wong said the gaming halls had attracted a growing number of high rollers.

'We aim to capture these customers by offering concierge services, including transportation and hotel bookings,' he said.

'These people choose to bet in our gaming halls because each hall has many gaming tables, while a VIP room only has two or three tables. They can easily switch to other tables in a hall when they find some tables unlucky.'

He said the firm would work hard this year to finalise a deal with non-executive director Lee Wai-man, who holds 3.82 per cent of Golden Resorts' issued capital, on acquiring his seven casino VIP rooms.

Mrs Chu said the acquisition amount would be 'huge' and the company would work out how to finance the deal. The company has $120 million cash on hand and gearing of 15.7 per cent.

She said the company was actively seeking acquisition opportunities around Asia and was interested in operating hotels in China.

Turnover last year rose 163 per cent to $372.39 million, of which about 66 per cent came from hotels and gaming, while watches contributed the remainder.

Mr Wong said the firm would decide this year whether to phase out its watch business, which made losses of $2.1 million last year and $4.7 million in 2004.

Shares in Golden Resorts rose 0.52 per cent to finish at $1.92 yesterday.