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Russia – Summit Ascent says it is open to ‘strategic local partners’ to operate Tigre de Cristal due to the war in Ukraine

By - 30 March 2023

Summit Ascent Holdings, the owner of Tigre de Cristal in Russia’s far eastern city of Vladivostok, has said it is now looking at ‘strategic local partners’ to run its integrated resort due to ongoing challenges generated by the war in Ukraine.

The group has said it is also continuing to delay the development of its Tigre de Cristal Phase 2 expansion.

It stated: ” Due to the unpredictable and volatile geopolitical tensions, the group is now taking a conservative approach to slow down the progress of TdC Phase II. While we regret having to make this inevitable decision, the integrated resort business environment changes rapidly and it is our mission to ensure that the company generates value for our shareholders. The company has been exploring alternative options, as well as potentially looking for strategic local partners who might be able to bring in value in terms of operating the integrated resort in the Russian Far East.”

Despite having no rolling chip input due to the lack of travellers, the casino stil managed ‘a full recovery in the local mass table and electronic gaming businesses in 2022.’

The group recorded a positive Adjusted EBITDA of HK$105.1m, compared to HK$40.9m in 2021. This improvement was mainly attributable to the growth in revenue of HK$106.8m during 2022, increased by 40 per cent on a year-on-year basis, and an impairment loss of HK$136.9m recognised on property, operating right and equipment for the year 2021 whereas no such impairment loss was recorded for the year 2022. Gross Gaming Revenue increased by 40 per cent in 2022 on a year-on-year.

The company said: “Overall, we are pleased to witness a full recovery in the local mass table and electronic gaming businesses in 2022. The performance in 2022 has been impressive, given that massive changes in the business environment have evolved, which made operating an integrated resort nothing comparable to the pre-COVID era. Nevertheless, these less-than-favourable factors have not hindered the Company from beating our records in the mass gaming market, which further amplified the privileged status of our integrated resort in the eyes of our customers in the Russian Far East.

“When COVID-19 hit, we had been remodelling Tigre de Cristal to concentrate on mass table business and electronic gaming business, which primarily targeted local Russian market, and had fine-tuned marketing campaigns accordingly to attract locals rather than the usual foreign tourists.”

Mass table drop increased by 46 per cent to HK$723m in 2022, compared to HK$496m in 2021. Electronic gaming volume was HK$4,836m in 2022, an increase of 39 per cent.

“Tigre de Cristal recognized the importance of local customers and will continue to build strong relationships with the local community, such as fully supporting local businesses by sourcing from them, organizing well-loved local events for Russians and working towards becoming an active and engaged member of the local community,” the company added.

“While the Russian tourism industry is slowly recovering from the COVID-19 pandemic, it now faces huge uncertainty from the impact of the significant escalation in the Russia-Ukraine conflict since late February 2022. The escalation in the Russia-Ukraine conflict has a negative effect on the motivation and choices for international tourists to freely travel into and out of the Russian Federation, which affects Tigre de Cristal’s customer base. The increased geopolitical risks induced by the Russia-Ukraine conflict have weighed adversely on global economic conditions throughout 2022, which makes it exceptionally challenging to determine the return on investment of TdC Phase II under the current environment. For the time being, TdC Phase II is suspended to minimise the Group’s capital expenditures and commitments.”

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