Macau casino operator Galaxy Entertainment Group Ltd reported negative adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) of HKD943 million (US$121.6 million) for the third quarter of 2020, due to what the firm described as “subdued revenue and ongoing staff costs” during the reporting period.
Nonetheless, the third-quarter EBITDA result represented a 31.2-percent improvement from the preceding quarter, “largely driven by greater emphasis on cost control,” said the company in a Tuesday filing to the Hong Kong Stock Exchange, providing selected unaudited performance indicators for the period.
The casino firm had reported positive EBITDA of HKD4.11 billion in the third quarter of 2019.
For the three months to September 30 this year, Galaxy Entertainment reported net revenue of HKD1.55 billion, down 87.8 percent year-on-year, but up 34.8 percent sequentially.
Galaxy Entertainment runs its flagship casino resort Galaxy Macau (pictured) on Cotai; the StarWorld Hotel, the group’s main venue on Macau peninsula; and Broadway Macau, a mass-market focused property next door to Galaxy Macau.
The group’s aggregate gross gaming revenue (GGR) in the third quarter stood at HKD867 million, a decline of 93.9 percent from the prior-year period, but up 78.8 percent from the preceding quarter.
Total VIP GGR for the period was HKD472 million, down 92.6 percent year-on-year, but a 49.8-percent improvement from the second quarter. Rolling chip volume grew by 76.0 percent quarter-on-quarter, to just above HKD11.80 billion; but it was still down 92.8 percent from a year earlier.
Aggregate mass table GGR and revenue from the electronic segment were down 95.1 percent and 94.4 percent, respectively, to HKD359 million and HKD36 million. Sequentially, it represented an improvement of 160.1 percent and 12.5 percent, respectively.
Galaxy Entertainment said travel restrictions linked to efforts to contain the further spread of Covid-19 had “continued to impact” the group’s businesses.
Gradual recovery
Lui Che Woo, chairman and founder of Galaxy Entertainment, said in prepared remarks that during a “period of low visitation to Macau,” the company had taken the “opportunity to renovate, reconfigure and introduce new products” to its resorts, in order to ensure the properties “remain highly competitive and appealing” to customers.
Mr Lui also commended the efforts to contain the pandemic, which he said had contributed to the progressive reinstatement in the third quarter of the mainland China exit visas permitting mainland residents to visit Macau under the Individual Visit Scheme (IVS).
“However, the majority of mainland cities only resumed IVS applications in late September, therefore visitation was not materially impacted in the third quarter, which will hopefully continue to ramp up in the fourth quarter,” said the chairman.
Applications for IVS visas had first restarted on August 26 but only for people from places in Guangdong. Applications for IVS permits by people from other parts of China restarted on September 23.
Mr Lui added: “Whilst it is pleasing to see a gradual increase in visitor arrivals to Macau with the reinstatement of IVS, we would expect a gradual increase in visitor arrivals as well as revenue over the coming quarters.”
Galaxy Entertainment said in its third-quarter highlights that the group’s cash and liquid investments amounted to HKD43.2 billion as of September 30, with net cash of HKD39.7 billion. The group’s debt as of that date stood at HKD3.5 billion.
In Tuesday’s filing, Galaxy Entertainment said the timetable for the development of Phases 3 and 4 of the Galaxy Macau property “may be impacted” because of the pandemic. “At this point we cannot quantify the impact, but we will endeavour to maintain our schedule,” noted the firm.
The company had mentioned earlier this year that it was aiming at a first-half 2021 launch for a portion of Phase 3 of Galaxy Macau. Phase 3 is to feature 1,500 hotel rooms, some casino space, a large-scale arena with 16,000 seats, and 400,000 square feet (37,161 sq metres) of MICE space.
