Success Dragon finds success even as gaming revenue declines
The gaming services company saw an impressive overall increase in revenue, despite a drop in revenue from its gaming-related activity.
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The six-month period that ended on September 30 wasn’t as detrimental to Success Dragon’s bottom line as it was to the vast majority of companies operating in the gaming space. The gaming services company just submitted its latest financial health report to the Hong Kong Stock Exchange and shows a year-on-year increase in revenue for the period of 14% off a total of $6.5 million. This is made particularly impressive because of the fact that the company’s gaming-related services took a 57.7% hit in Macau-derived revenue during the same period.
From April to September, Success Dragon saw revenue out of Macau of just $2.29 million, down substantially from the $5.41 million it saw in the same period last year. The decline wasn’t just because of COVID-19, either, with the company explaining, “The decrease was mainly attributable to intense competition in the Macau gaming market faced by the group. The market competition was further worsened by the outbreak of Covid-19 pandemic.”
The global coronavirus pandemic certainly played a key role in the reduction in the numbers, with casinos and gaming operations everywhere being greatly restricted. Success Dragon has had a strong symbiotic relationship with Macau that has routinely accounted for about 35% of company revenue. When the COVID-19 debacle began, Success Dragon took measures to reduce its operational costs in order to offset the negative market movement, but these couldn’t prevent it from taking a loss of $632,100 during the period, compared to the $219,000 loss it reported a year earlier for the same six months.
The net loss for the company moved the right way this year as it headed to the black, but it fell short at $786,000. Still, given that it reported a net loss of 890,100 last year, and given the issues the gaming industry is facing because of COVID-19, the gains are notable. Success Dragon has maintained a diverse portfolio of activity that has been able to keep the money flowing as gaming contracts.
Among those activities are two that rarely go out of style. The company acts as a lender in Hong Kong, and there probably has been no shortage of entities looking for extra cash due to the still-ongoing pandemic that is now more than a year old. In addition, Success Dragon is into gold and other precious metals. That segment provided the company with $3.81 million in revenue and $31,347 in profit for the period.
Moving forward, Success Dragon is going to focus more resources on its gold operations, opening a production line in China’s Yunnan Province for the “extraction of gold and other precious metals,” which it will then make available for purchase by buyers and dealers throughout the country. Over the past year, the price of gold has risen about 22.4% and, in five years, has risen 67.68%.
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