NagaCorp first showed an interest in into Russia back in 2013, specifically the Vladivostok Integrated Entertainment Zone. Plans moved forward in 2014 before the group officially broke ground in 2015.
However, the project stalled in March 2022 shortly after Russia began its attack on Ukraine in February that year. NagaCorp did not reference the war specifically, instead saying work had halted due to a “force majeure event”.
The project has been on hold ever since, with NagaCorp saying an independent revaluation of the initiative flagged impairment costs. For H1, this is expected be between US$85.0m (£66.5m/€77.8m) and $95.0m. No such impairment was recorded for the previous financial periods.
“Such impairment was due to an increase in the discount rate used for the purpose of determining the project present value and the lower business volume expected to be generated from the Vladivostok Project,” NagaCorp said.
Net loss could reach $6.9m in H1
Given the impact of this, NagaCorp warned it could be facing a net loss for in the first half of its financial year.
Depending on how much the impairment totals, net loss could be $6.9m. However, should impairment be at the lower end of the forecast range, NagaCorp could still post a profit of $3.1m for the period.
NagaCorp said the profit warning is based on preliminary figures, with the group still putting together its H1 results. These are due for publication towards the end of the month, though a fixed date hasn’t yet been shared.
The group also said despite the impairment, its overall financial position remains “healthy”. It added the expected impairment is unrealised and does not affect operational cash flows.
NagaCorp shares fell after the news broke earlier today (13 August). Share price fell as much as 11.1% but has since recovered slightly to HK$3.19 per share, down 4.5% from Monday’s closing price of $3.34.
Original article: https://igamingbusiness.com/finance/nagacorp-profit-warning-vladivostok/
