Macau-based gaming equipment distributor Asia Pioneer Entertainment Holdings Ltd (APE) says it expects to record a loss of HK$29 million (US$3.7 million) for the six months to 30 June 2020 due to the impact of COVID-19 and a HK$22.8 million write-off related to a terminated gaming equipment lease deal.

Some details of APE’s 1H20 financials formed part of a profit warning filed with the Hong Kong Stock Exchange on Wednesday, with the company revealing a likely 46% year-on-year fall in revenue for the period to HK$11.8 million (US$1.5 million). The half-year loss would comprise a 429% increase from a loss of HK$5.5 million (US$710,000) over the first six months of 2019.

APE outlined a few key reasons for the higher loss, including the outbreak of COVID-19.

“The operations of casinos in Macau and Southeast Asia have been adversely affected by the outbreak of the COVID-19 pandemic leading to a weaker demand for technical sales and distribution of electronic gaming equipment (EGE) of the Group,” the company said.

“Some of the orders of the EGE received by the Group were delayed or cancelled.”

APE also said it has to record a one-time write-off of finance lease receivables of approximately HK$22.8 million after terminating two finance lease agreements for the leasing of EGE in May. The agreements were terminated after Siam Star Leisure Co, Ltd, which leased EGE from APE for use at a casino in Cambodia, and GLIMEX Inc, which did the same for a casino in the Philippines, failed to pay lease rental.

APE will publish its full results on 13 August.