On behalf of the Board, I am pleased to present the annual results of the Group for the year ended 31 December 2023.
Macau has witnessed a significant resurgence in visitors since the reopening of borders and the ceasing of most of the travel restrictions related to the Covid-19 pandemic in early 2023. The Mainland China government also likewise cancelled most of the epidemic prevention and b order quarantine measures around such time to reconnect with the international markets. According to published statistical data, Macau received about 28.2 million visitors in 2023, soared by 394.7% when compared with that of 5.7 million in 2022, representing 71.6% of the number in pre-pandemic 2019. GGR in Macau was MOP183.1 billion in 2023, grew by 333.9% when compared with that of 42.2 billion in 2022, representing about 62.6% of the number in pre-pandemic 2019.
Benefitting from the recovery of the gaming markets from the severe impacts of the pandemic, the Group’s gaming business in Macau has demonstrated notable improvements as a result. The Group’s reported revenue for the year ended 31 December 2023 was HK$634.3 million, representing an increase of 113.0% over that of HK$297.8 million for the year ended 31 December 2022. The Group’s Adjusted EBITDA for the year ended 31 December 2023 was a profit of HK$133.6 million, as compared with a loss of HK$109.0 million for the year ended 31 December 2022. Revenue from the provision of casino management services for Casino Kam Pek Paradise in Macau has made a significant contribution to the improvement on the Group’s business and financial results and such revenue increased by 111.6% from HK$266.9 million in 2022 to HK$564.8 million in 2023.
The Macau gaming industry is progressing well on track following the implementation of both the new “Legal Framework for the Operations of Casino Games of Fortune” (Law no. 16/2001) and the new gaming concessions for ten years under their respective Concession Agreement on Operating Games of Luck in Casinos in Macau effective on 1 January 2023 awarded to six gaming enterprises by the Macau government. The Group’s new service contract (the “New Service Contract”) with SJM Resorts for the provision of casino management services in Casino Kam Pek Paradise (which operates under SJM Resorts’ gaming concession) for a term of 3 years has also taken effect from 1 January 2023. As a result of the Group’s cautious and prudent approach during the negotiation for the New Service Contract with SJM Resorts in late 2022, the Group has been allocated quotas for managing 30 gaming tables and 100 slot machines in Casino Kam Pek Paradise for the 3-year term of the New Service Contract, as compared with 47 gaming tables and almost 200 slot machines as at 31 December 2022 under the previous service contract which expired on 31 December 2022. Meanwhile, the Group has also taken a flexible strategy and worked closely with SJM Resorts to cater for the market sentiment and demand. For instance, in view of the market demand, upon amicable discussions, both parties agreed to a temporary allocation of an additional 10 gaming tables in Casino Kam Pek Paradise for the period from 8 May 2023 to 31 October 2023. The Group will pay close attention to the market trend and endeavour to maximise the revenue and profit generated by Casino Kam Pek Paradise.
The increase in the sale of electronic gaming equipment and systems in Macau is another primary contributor to the uplift in the Group’s revenue for the year ended 31 December 2023 when compared with that for the year ended 31 December 2022. Revenue contributed by this business segment in Macau was approximately HK$56.8 million, increased by 667.6% from approximately HK$7.4 million for the year ended 31 December 2022. This increase has affirmed our belief that there is huge potential for ETGs and slot machines to grow in not only the Macau gaming market, but also the fast-growing gaming markets in Southeast Asia such as the Philippines, Vietnam, and Cambodia and the North American gaming markets. Electronic gaming machines could accommodate lower minimum bets from patrons while bearing lower operating costs to operators when compared with those of gaming tables. As the economy and society at large have returned to normal, the Group will take a proactive approach to look to the Southeast Asian gaming markets as well as the North American gaming markets in addition to the Macau gaming market for placement of our gaming machines and products.
As part of the Group’s strategic plans to develop a diversified business portfolio, during the year ended 31 December 2023, the Group has commenced a new business activity of engaging in the supply of smart charging stations and related equipment for E-Vehicles to customers in Mainland China. The Group anticipates that the returns from this new business during its relatively embryonic stage would not be significant but is pleased to note that it contributed HK$12.4 million to the Group’s revenue for the year ended 31 December 2023, which was certainly a positive sign. In view of the growing importance of reducing carbon emissions and promoting comprehensive green transformation in economic and social development, we anticipate that there is a potential rise in demand for E-Vehicles and related smart charging stations and equipment in Mainland China and will explore further opportunities in providing innovative and renewable energy solutions in the future. As a high-tech enterprise, the Group will continue to invest in high technology and research and development in this area to attain the Group’s strategic development goals of becoming a provider of comprehensive solutions to smart charging, thereby contribute to our Country’s technology development and environmental protection.
After around three years under the shadow of Covid-19 pandemic, we now have entered into the post-pandemic era. Cross-border business activities have fully resumed. The gaming markets are reaping benefits from the post-pandemic recovery, even though demand and profitability have not yet returned to pre-pandemic levels. Still, the global macroeconomic landscape remains unpredictable, with challenges such as geopolitical tensions, economic instability, soaring inflation, and interest rate hikes shaping the business landscape and adding to operational costs. Despite such uncertainties, our confidence in the long-term future of gaming businesses, as well as the business relating to E-Vehicles and environmental protection, remains resolute. The Group will continue to look out for business opportunities to make investments to further promote the Group’s growth.
Lastly, I would like to take this opportunity to express my sincere appreciation to our Shareholders, customers, and business partners for their continuing support to the Group, and all staff members for their dedication and hard work over the past years.
On behalf of the Board