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Casino investor expects to write off more than 50 per cent due to COVID-19

Thu, Aug 27, 8:32am by Noah Taylor

A troubled casino investor is forecasting losses for the six months to June 30 to fall by more than 50 per cent.

Asgam reports Imperial Pacific International Holdings said the closure of casino operations due to COVID-19 in March has triggered to year-on-year decline.

Issuing a profit warning on Tuesday, IPI revealed that consolidated loss by the company and its subsidiaries looks likely to decline by no less than 50 per cent compared with the same period in 2019.

The loss of US$243 million was attributable to the owners of the company, the report said.

IPI said the expected decrease in unaudited consolidated loss is mainly attributable to the reduction in impairment losses recognised for trade receivables.

Last year, the company reported gross trade receivables of US$1.18 billion through June 30 2019, of which US$140.6 million was from one customer and US$320 million from its 10 largest customers.

Nevertheless, the expected reduction in loss won’t provide much comfort to IPI, which recently requested an abatement of its annual US$15.5 million casino licence fee, supposedly due to pressure brough about by COVID-19.

The US Federal Court also recently ordered IPI to pay US$5.6 million to its former contractor, Pacific Rim Land Development, for services rendered.

Tabcorp flags massive losses due to COVID-19

One of Australia’s biggest betting and lotto companies is flagged huge losses caused by the COVID-19 pandemic.

News.com.au reported in April that Tabcorp has warned the downturn caused by the coronavirus pandemic has slashed the value of its business by more than $1 billion.

In an update provided to investors on Monday morning, Tabcorp said its financial results for the year ended June 30 would incur a $1 billion to $1.1 billion non-cash impairment charge.

It said the charge had dented the value of it goodwill and was a direct impact of government measures imposed to curb the transmission of COVID-19.

A large proportion of Tabcorp’s sports betting and lotteries businesses were impacted by venue closures and the suspension of sporting fixtures across Australia.

The company also noted the expense to the business was partly a result of accelerated retail contraction and uncertainty about how long the pandemic would last.

Tabcorp’s outgoing chief executive David Attenborough said COVID-19 had materially impacted its wagering and media business.

“We are facing into a challenging and uncertain environment, and the current operating conditions and those expected into the future are relevant factors in assessing the value of the goodwill in those businesses at this time,” he said.

The group has tipped its profits and earnings for the 2020 financial year will be lower than the previous corresponding period in 2019.

Tabcorp expects to post a net profit between $267 million and $273 million, approximately $130 million lower than the previous financial results in 2019.

It also expects earnings before tax and interest will be in the range of $990 million to $1 billion, which is lower than the $1.124 billion reported in 2019.

“We remain confident in the strength and resilience of Tabcorp’s diversified portfolio of assets and are pleased that integration is now substantially complete,” Mr Attenborough said.

“We are focused on supporting our people and partners during these challenging times, while ensuring Tabcorp emerges strongly post COVID-19.”


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