The chairman of Macau casino operator Galaxy Entertainment Group Ltd says he hopes Macau can ease the current travel restrictions “within a month” to enable visitors to return in meaningful numbers.
Lui Che Woo (pictured), ranked one of Hong Kong’s richest entrepreneurs thanks in part to his investment in a Macau casino licence, made the comment on the sidelines of the group’s annual general meeting in Hong Kong on Wednesday.
Although Macau’s borders remain open, a number of travel restrictions in the region – put in place as a result of the Covid-19 emergency – has coincided with a dramatic fall in the daily number of inbound tourists.
A representative of the Hong Kong travel trade said on Tuesday the industry expected Macau to be its partner soon for a so-called “travel bubble” system – that would allow movement between the two places in the aftermath of the initial Covid-19 crisis – without the need for a 14-day quarantine at each end.
Francis Lui Yiu Tung, vice-chairman of Galaxy Entertainment, noted in his comments to the Hong Kong media on Wednesday, that the group’s current daily operating costs in Macau are about US$2.8 million. But he expressed confidence in the company’s financial strength to withstand the pressure posed by the Covid-19 pandemic.
Several investment analysts have indicated that Galaxy Entertainment has enough capital liquidity to survive a number of years in a zero-revenue environment.
A number of brokerages has also flagged that the key to the recovery of Macau’s casino industry – that in May saw a 93.2 percent dip year-on-year in gross gaming revenue (GGR) – is a return of the tourism trade from mainland China.
Although the regional travel restrictions mostly kicked in during March, the tail end of the first quarter, Galaxy Entertainment had in May reported that its adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) for the first three months of 2020 stood at HKD283 million (US$36.5 million), down 93 percent from the prior-year period. The travel trade however had already been impacted since late January due to the Covid-19 alert.
Galaxy Entertainment was also now continuing the works on “large-scale” renovations at its Macau properties, and the works on Phase 3 and Phase 4 of its flagship Cotai casino resort, Galaxy Macau, Mr Francis Lui added.
His father the group’s chairman, when asked on Wednesday whether the casino operator was – amid the current trading woes – still interested in a licence for Yokohama, Japan, noted simply that country was currently coping with Covid-19 and the company needed to observe further the actions of the Japanese government.
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”The travel/border policy between mainland China and Macau will fully normalise by the end of September (i.e., before the all-important October Golden Week)”
DS Kim, Derek Choi and Jeremy An
Analysts at JP Morgan Securities