Suncity Group declared its financial performance for the first half of 2020, with a substantial decrease in income compared to the same period last year. However, a notable reduction in the value gains on convertible bonds lessened the company’s overall financial shortfall.
Suncity Group, a company specializing in gaming services and integrated resort operations, experienced a significant decline in income during the first six months of 2020, compared to the same period in the previous year. Nonetheless, a considerable reduction in the value gains on convertible bonds mitigated the company’s net loss.
Income for the period ending June 30th decreased to RMB937 million (GBP10.2 million/EUR11.5 million/USD13.8 million), with customer contract income accounting for RMB774 million and rental property income contributing RMB163 million.
The majority of Suncity’s revenue in the first half originated from Macau, contributing RMB625 million, representing a 74.4% decrease compared to the same period last year. Vietnam contributed RMB10.9 million, where the company provides management services for the new Hoiana integrated resort; Cambodia contributed RMB1.2 million, and China property rentals contributed RMB2.8 million.
The reduction in income led to a 74.2% decrease in the cost of goods sold, reaching RMB658 million, resulting in a gross profit of RMB2.8 billion, down 45.8%.
Despite the decline in revenue, Suncity’s pre-tax loss was significantly reduced, decreasing from RMB1.26 billion to RMB204.9 million.
In spite of a reduction of 332 million yuan due to fair value adjustments in investment properties, expanding losses in joint ventures, and heightened administrative expenses, the organization recorded a gain from fair value changes in derivative financial instruments that balanced out this reduction.
This is connected to the company’s convertible bonds, whose value rose by 588.2 million yuan, after being written down by 1.07 billion yuan in the first six months of 2019. After subtracting a tax credit of 81.2 million yuan, Suncity’s net loss for the first half of the year was 123.2 million yuan, compared to 1.25 billion yuan in the first half of 2019.
This surpassed the company’s prediction of a net loss of 108 million yuan last month.
Suncity Chairman Alvin Chau stated: “There is no doubt that the first half of this year has been a challenging period, as the COVID-19 pandemic is affecting all aspects of the economy – travel restrictions, business closings, stock market declines.”
Sign up for the iGaming newsletter.