Macau-based gaming equipment supplier Paradise Entertainment Ltd has reported a substantial turnaround in its financial performance for the first half of 2024. The company also revealed plans to establish a significant presence in the Philippines, capitalizing on the region’s booming gaming market.
Financial Performance Overview
Paradise Entertainment Ltd, a leading provider of Live Multi-Game (LMG) Terminals and the operator of Casino Kam Pek Paradise in Macau, released its financial results for the first half of 2024 (1H24). The company reported a remarkable profit of HK$119.4 million (US$15.3 million), reversing a loss of HK$3.0 million (US$385,000) from the same period last year. This positive shift was attributed to improved sales across both its key business segments: gaming operations at Casino Kam Pek Paradise and the sale of electronic gaming equipment and systems under its LT Game brand.
Revenue for 1H24 surged by 72.4% year-on-year, reaching HK$425.3 million (US$54.5 million). Of this total, HK$356.5 million (US$45.7 million) came from Casino Kam Pek Paradise, while HK$68.2 million (US$8.7 million) was generated from the sale of gaming equipment and systems. The company’s Adjusted EBITDA also saw significant growth, increasing to HK$147.7 million (US$18.9 million), up from HK$31.0 million (US$4.0 million) in the previous year.
Casino Kam Pek Paradise Performance
The gaming operations at Casino Kam Pek Paradise, located on the Macau peninsula, were a significant contributor to the company’s robust performance. Gross Gaming Revenue (GGR) at the casino increased by 48.3% year-on-year, totaling HK$651.7 million (US$83.5 million). Live Multi-Game Terminals were particularly noteworthy, contributing HK$385.6 million (US$49.4 million) to the GGR, showcasing the continued popularity of these gaming options among patrons.
Growth in Gaming Equipment Sales
Paradise Entertainment’s gaming equipment segment, operating under the LT Game brand, also demonstrated substantial growth in 1H24. Revenue from this segment reached HK$68.2 million (US$8.7 million), primarily driven by the sale of 235 LMG terminals and related products, which accounted for HK$47.1 million (US$6.0 million). Additionally, the provision of upgrading services to LMG terminals contributed HK$19.2 million (US$2.5 million), and leasing of electronic gaming equipment and systems added HK$1.9 million (US$243,500).
Expansion into the Philippines
In line with its growth strategy, Paradise Entertainment Ltd is actively pursuing expansion opportunities beyond Macau. The company announced its intention to establish a new office and showroom in the Philippines, a move aimed at tapping into the largest electronic gaming machine market in Asia. The Philippines presents a significant opportunity for Paradise Entertainment due to its flexible regulatory environment, numerous casinos, and a diverse range of gaming types.
“The Group is actively expanding its business of supplying gaming equipment and systems to other Asian markets, particularly the Philippines as it holds the title of the largest electronic gaming machine market in Asia, offering great flexibility with numerous casinos and a variety of gaming types,” the company stated. “This presents a significant opportunity for the Group to leverage its expertise and innovative product offerings to cater to the diverse gaming preferences of the Philippine market.”
Strategic Initiatives in the Philippines
To support this expansion, Paradise Entertainment is in the process of setting up a physical presence in the Philippines, which will include a new office and showroom. This move is expected to strengthen the company’s foothold in the region, enhance customer relationships, and provide direct support and after-sale services.
While the company did not derive any revenue from the sale or leasing of gaming equipment to overseas markets in 1H24, it has already made significant inroads in the Philippines. Paradise Entertainment has reached an agreement with several Integrated Resorts (IRs) operators in the Philippines to conduct a trial run of 24 slot machine units. Furthermore, the company plans to collaborate with partners to deploy 144 mini slot machines and has secured agreements with various distributors to promote and distribute its gaming equipment and systems in the Philippine market.
Future Outlook and Expansion Plans
Paradise Entertainment is optimistic about its growth prospects in both existing and new markets. The company recognizes the immense potential in the growing markets across Asia, including the Philippines, Vietnam, and Cambodia, as well as in North America. Despite acknowledging the global economic uncertainties due to geopolitical tensions, monetary policies, and high interest rates, the company remains committed to an adaptive but prudent approach to its expansion strategy.
“In view of these uncertainties and challenges, the Group is committed to an adaptive but prudent approach. Recognizing the immense potential in the growing markets across Asia, such as the Philippines, Vietnam and Cambodia, as well as the North American markets, the Group will take a proactive approach to explore these overseas gaming opportunities in addition to the Macau gaming market,” the company noted.
Paradise Entertainment Ltd’s financial turnaround and strategic expansion into the Philippines mark a significant milestone for the company as it seeks to capitalize on new growth opportunities in Asia’s dynamic gaming market. By establishing a strong presence in the Philippines and continuing to innovate its product offerings, the company is well-positioned to enhance its market share and deliver sustainable growth in the years to come.