Financial Performance - The total revenue for the group in 2022 was HKD 372,300,000, an increase of 40% compared to HKD 265,500,000 in 2021, primarily driven by the local gaming and slot machine business in Russia [4]. - The group recorded a positive adjusted EBITDA of HKD 105,100,000 in 2022, compared to HKD 40,900,000 in 2021 [4]. - The company reported a profit attributable to shareholders of HKD 11,800,000 in 2022, a significant turnaround from a loss of HKD 230,000,000 in 2021, mainly due to increased revenue and the absence of impairment losses recorded in 2021 [4]. - The adjusted EBITDA for the Crystal Tiger Palace in 2022 was HKD 105,100,000, a significant increase from HKD 40,900,000 in 2021, representing a growth of 157% [33]. - Total revenue from the gaming operations increased by 40% year-on-year, reaching HKD 401,907,000 in 2022 compared to HKD 286,101,000 in 2021 [39]. - The company recorded a net profit attributable to shareholders of HKD 11,847,000 in 2022, a recovery from a loss of HKD 229,988,000 in 2021 [36]. - The total operating expenses increased to HKD 268,200,000 in 2022 from HKD 226,877,000 in 2021, reflecting a rise in employee benefits and other operational costs [34]. - Operating expenses for the group rose by 18% to HKD 268.2 million in 2022, up from HKD 226.9 million in 2021 [49]. - The company reported no impairment losses related to properties, operating rights, and equipment in 2022, compared to HKD 136,900,000 in 2021 [33]. - The group maintained a strong financial position with total equity attributable to owners of HKD 3,180,400,000 as of December 31, 2022, compared to HKD 3,168,400,000 in 2021 [72]. Operational Developments - The gaming and hotel project spans approximately 36,000 square meters and operates year-round, offering a diverse range of gaming options to customers [8]. - The group operates the highest-rated luxury five-star hotel in the Russian Far East, featuring 121 rooms and suites, recognized as "Russia's Best Casino Hotel 2021" by the World Casino Awards [8]. - The development of the Crystal Tiger Palace Phase II was initially planned to nearly double the existing accommodation capacity and non-gaming facilities to serve potential high-stakes customers, particularly non-Russian tourists in the coastal entertainment area [12]. - The second phase of the Crystal Tiger Palace project has been suspended due to the ongoing conflict between Russia and Ukraine, significantly impacting the project's outlook [23]. - The company has shifted its focus to local markets, particularly in Russia, due to the impact of COVID-19 and travel restrictions, resulting in no revenue from VIP gaming operations in 2022 [40]. - The company has established a strong position in the local market while exploring potential expansion into other markets in the future [30]. Market Conditions and Challenges - The ongoing conflict between Russia and Ukraine has introduced significant uncertainty, impacting international tourist access to Russia and consequently affecting the customer base of the group's operations [10]. - The group continues to monitor the market situation and the effects of the Russia-Ukraine conflict on its financial condition and operations [11]. - The ongoing impact of COVID-19 has created significant uncertainty in the tourism and gaming industries, with expectations that recovery will be gradual and challenging [60]. - The reliance on the tourism sector has made businesses vulnerable to the adverse effects of COVID-19, with the travel industry likely to be one of the last to recover [61]. - Travel restrictions and quarantine measures have significantly reduced foreign visitor numbers to the group's properties, particularly from China, which has strict travel policies [62]. - The company has adjusted its marketing strategies and pricing in response to ongoing challenges from sanctions and travel warnings affecting operations in Russia [28]. Financial Management and Investments - A short-term loan of $120,000,000 was provided to Suntrust Resort Holdings Inc. at an annual interest rate of 6%, with a repayment period starting three months from the loan date [13]. - The company plans to allocate up to HKD 500 million from the proceeds of the 2019 placement for a revolving loan to LET [23]. - The net cash generated from operating activities for 2022 was HKD 85,825,000, significantly higher than HKD 20,061,000 in 2021 [75]. - The net cash used in investing activities for 2022 was HKD 106,575,000, a recovery from a net cash outflow of HKD 972,863,000 in 2021 [75]. - The group has sufficient cash and cash equivalents to support its operational and capital expenditure needs [78]. - The group has no assets pledged or encumbered as of December 31, 2022 [79]. Governance and Management - The company has a strong management team with members holding significant experience in various sectors, including finance and operations [105]. - The board includes independent non-executive directors with diverse backgrounds in finance and corporate governance, ensuring robust oversight [100]. - The company has established a strong governance framework with various committees to oversee financial and operational performance [102]. - The company has complied with the corporate governance code, except for a deviation in rule F.2.2, which is explained in the section on communication with shareholders [112]. - The company has established a risk management organizational framework, which includes the board, audit committee, and risk management task force [164]. - The board is responsible for risk management and internal control systems, ensuring they are effective and aligned with the group's strategic objectives [164]. Environmental, Social, and Governance (ESG) Initiatives - The report covers the environmental, social, and governance (ESG) policies and performance data for the fiscal year ending December 31, 2022 [187]. - The company emphasizes its commitment to creating long-term value for stakeholders while integrating sustainable development principles into its business operations [186]. - The company has established a governance framework to address environmental, social, and governance (ESG) operational matters [197]. - A dedicated ESG working group has been formed, led by the group's audit manager, to collaborate with G1 Entertainment Limited in Russia [194]. - The board of directors is responsible for overseeing the management of ESG strategies and policies [195]. - Stakeholder engagement is prioritized to gather insights for developing sustainable strategies [199].
凯升控股(00102) - 2022 - 年度财报