Summit Ascent Optimistic on Tigre de Cristal despite Russia’s Declining Economy

Posted on: March 16, 2022, 09:55h. 

Last updated on: March 16, 2022, 10:44h.

Erik Gibbs Read More
Expertise: Asia Pacific Gaming, Gaming Business, Global Gaming.

Summit Ascent understands that Russia is completely unstable right now. However, it is confident that its Tigre de Cristal resort will successfully navigate the situation and emerge strong.

Tigre de Cristal
Summit Ascent-backed Tigre de Cristal in the Russian Far East. The casino resort is going through a tough time as a result of COVID-19 and the ongoing Russia-Ukraine war. (Image: Asia Gaming Brief)

Russia’s invasion of Ukraine, according to many analysts, will have an impact on the global economy for years. Domestically, the fallout could be much worse, as sanctions increase and businesses leave the country.

Summit Ascent issued a statement today to update the gaming industry on its position with Tigre de Cristal. It explained that it is closely monitoring the war between Russia and Ukraine, including how the ruble’s plummeting value and interest rates might impact operations.

What was to be a self-sustaining resort region in the Russian Far East faces trouble, as well. NagaCorp already stopped its involvement in the construction of a resort there. Summit Ascent isn’t ready to back out. It is, however, paying very close attention to unfolding developments.

Tigre de Cristal Remains Viable

Summit Ascent added that it will continue to assess the situation and make adjustments if and when they are necessary.

The update follows only a couple of months after Suncity Group, its controlling entity, fell apart. Suncity bought a significant portion of Summit Ascent in 2020. However, after Macau officials arrested former Suncity boss Alvin Chau, the company faced a new set of problems.

The acquisition led Suncity to own almost 70% of Summit Ascent. Chau lost his stake in Suncity – and Suncity lost a source of funds – when the disgraced executive failed to repay a loan to lenders.

Upcoming Financial Statement Shows Losses

Tigre de Cristal isn’t likely sitting in a good place financially. It closed in 2020 because of COVID-19 and has had difficulty finding solid ground after reopening last year.

As a result of the issues it has experienced, Summit Ascent is not in a good spot financially. It apparently has money saved somewhere, since it says it doesn’t need financial assistance. But its losses are mounting.

The company is putting together its updated financial health report, which will be released soon. However, in explaining its current stance on Tigre de Cristal, it provided some details. It expects to take a loss of at least HKD273.8 million (US$35.0 million) for 2021, representing a worsening position. The amount is wider than previous expectations by almost 473%.

The loss is a result of hits the company has taken on certain financial instruments, as well as an impairment tied to “property right and equipment.” The loss attributed to the derivatives is around HKD149.1 million (US$19.06 million), while the impairment is HKD136.9 million (US$17.5 million).

The weaker performance comes even as Summit Ascent improved its EBITDA (earnings before interest, taxes, depreciation and amortization) last year. It had a negative EBITDA of HKD14.7 million (US$1.88 million) in 2020, but reversed that and will report an EBITDA of around HKD40.9 million (US$5.23 million) for 2021.