Operator News
Nepal – Silver Heritage sees revenues fall by 29 per cent
By Phil - 3 March 2017
Silver Heritage, an operator of casinos in Nepal and Vietnam, has reported GGR of US$32.13m, down 29 per cent on 2015, although Total Revenue of US$16.91m was down two per cent.
At the Phoenix International Club situated just outside of Hanoi in Bac Ninh, Vietnam, visitation numbers were up more than 40 per cent year on year from 103,000 to 146,000, and total Table Drop increased by 19 per cent from US$57.3m to US$68.1m.
Silver Heritage said: “We generated US$3.98m of Gross Profit. GGR at Phoenix was US$16.96m for FY2016, down 6.1 per cent on the previous year, and 19.3 per cent lower than our forecast included in the IPO prospectus. This was primarily due to additional gaming tables not being installed on the main gaming floor by the owners of Phoenix for management by the company as anticipated, together with a lower hold rate of 19.9 per cent compared to the 26.5 per cent achieved in FY2015.” Electronic Gaming Machines at the property performed well generating GGR of US$3.40m, or 20.1 per cent of the total GGR, up from US$2.84m in FY2015, or 15.7 per cent of the total GGR. Gross Profit however, was 29.8 per cent down on FY2015. The Millionaire’s Club & Casino Kathmandu situated in Kathmandu, Nepal, we experienced more modest returns on capital invested, generating US$537,000 of Gross Profit. GGR was US$5.56m for FY2016, up 5.2 per cent on the previous year, but 17.6 per cent lower than our forecast included in the IPO prospectus. Although there was growth compared to the previous year, the growth rates did not meet with our expectations detailed in our forecasts and this was largely due to an increased level of competition in the Kathmandu market with six casinos now in operation in the city. Visitation numbers however, still increased by 26 per cent year on year from 66,000 to 83,000, and total Table Drop increased 11 per cent from US$21.4m to US$23.7m.
The operator said: “We have started FY2017 with good momentum across our current operations, and look forward to delivering growth in our existing casinos in both Kathmandu, Nepal and Vietnam over the course of the year. Trading in year-to-date 2017 has been relatively strong at Phoenix in Vietnam, and compared to last year, GGR for the year to date is 20 per cent up after the first 58 days of the year. Following a period of capital investment in the wider resort by the owners, Phoenix International, new hotel accommodation and new non-gaming facilities are due to become operational before the end of the second quarter, which we believe will enhance the overall attractiveness of the casino resort and enable us to drive increased footfall. We plan to add 30 new EGMs to the Phoenix operation by the end of March 2017 to address the expected incremental footfall to Phoenix, and to offer a wider choice of games to existing customers.”
In terms of an update on its casino under development; Tiger Palace Resort in Bhairahawa, Nepal, the company said: “Silver Heritage is encountering unexpected delays in the final completion of Tiger Palace Resort Bhairahawa. The Board has been conducting a review of the impact of these delays and the initial results of these investigations have suggested that the delays may have a material effect on the completion date and final project cost of Tiger Palace Resort Bhairahawa. Silver Heritage shares are currently in suspension so that the Board may complete its investigations to determine the extent of the anticipated delay and increase in project cost in order to properly inform the market.”
