Second-quarter profits for Asia Entertainment & Resources Ltd. plunged 86.4 percent from last year to $3 million as rolling chip turnover at the Nasdaq-listed company’s five Macau VIP rooms slipped 4.9 percent to $4.5 billion. Revenues rose 8.6 percent in the April-June period to $63.5 million, helped by a higher-than-normal win rate of 3.06 percent. AERL expects its operating income before amortization and changes in value for contingment payments for acquisitions to reach $60 million-$75 million for the year after hitting $24.4 million in the first half.
James Preissler, an AERL director, said the company’s business mix is shifting, with direct customers, previously about 15 percent of the business, becoming a “very, very small piece” with AERL’s tightening of credit while volumes from cash customers coming through agents are growing rapidly. “The cash business has more than doubled the last couple of years,” he told analysts. Agent commissions for cash VIP business range from 1.1 percent to 1.25 percent, he said. The company said it expects rolling chip turnover for the year to reach $19 billion; it totalled $10.04 billion for the first seven months of 2013. It plans to submit its application to list shares in Hong Kong within three weeks.