International Entertainment (01009)'s profit warning expects annual shareholders' losses to be about HK$500 million

Zhitong Finance App News, International Entertainment (01009) issued an announcement. It is anticipated that the Group may obtain losses attributable to company owners of about HK$500 million in the 12 months ending June 30, 2026, while losses attributable to company owners for the 12 months ending June 30, 2025 are about HK$282 million.

Based on a preliminary review of the management accounts, the Board noted that although the Group's gross profit increased significantly due to increased gaming revenue generated by physical casino operations and the provision of gaming platforms to other authorized gaming operators, the Group is still expecting a net loss during the period. The anticipated net loss due to the company's owners during the period is mainly due to: (i) Non-cash losses of approximately HK$425 million due to changes in the fair value of financial liabilities in fair value of the financial liabilities included in gains and losses relating to the issuance of convertible notes with a total principal amount of HK$1.6 billion during the period. The loss was non-cash and was mainly due to the accounting treatment requirements of the relevant financial reporting standards for such financial liabilities; (ii) an increase in sales and marketing expenses, mainly due to increased expenses on marketing activities and promotion activities to enhance the attractiveness and competitiveness of the Group's casino services.

The Board wishes to emphasize that losses arising from changes in the fair value of convertible bonds are non-cash accounting items confirmed in accordance with the Hong Kong Financial Reporting Standards and have no impact on the Group's normal business operations and operating cash flow. Excluding this non-cash loss, it is expected that the Group's loss attributable to company owners for the current period will be reduced compared to the previous period.