Casino services firm Macau Legend slips into red in 1H
Hong Kong-listed casino services firm Macau Legend Development Ltd recorded a HKD107.5-million (US$13.7-million) loss for the first half of 2019, the company said on Thursday. That compares to a profit of HKD2.85 billion in the same period last year.
The company’s first-half 2018 results had been boosted by the sale the Landmark Macau hotel for a consideration of HKD4.60-billion. The firm still manages gaming operations at the property.
Macau Legend overall operates three gaming facilities on peninsula Macau – the Legend Palace Casino, Babylon Casino and Landmark Casino – and a casino resort in Laos, the Savan Legend Hotel and Casino. The Legend Palace Casino and Babylon Casino are located at the waterfront entertainment complex Macau Fisherman’s Wharf, also run by Macau Legend.
Announcing its first-half results at the end of the trading day, Macau Legend said adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) were about HKD151.5 million, representing a 24.5-percent decrease in year-on-year terms.
For the six months ended June 30, total revenue improved to nearly HKD1.08 billion, up from HKD951.6 million in the prior-year period. Gaming was the company’s biggest contributor to total revenue, registering a 28.7-percent increase to approximately HKD867.5 million for the January to June 2019 period. Non-gaming revenue fell by about 22.8 percent year-on-year, to HKD214.2 million in the first half of the year.
The increase in gaming revenue was primarily due to a 32.2-percent jump in the revenue contributed from Legend Palace Casino (pictured) to about HKD405.3 million. Gaming revenue also increased at Babylon Casino during the period, reaching HKD78.8 million, up by HKD19.5 million in year-on-year terms. Gaming revenue at Lao-based Savan Legend Casino however declined during the first half of 2019, standing at slightly below HKD113.0 million compared to HKD123.6 million in the prior-year period.
As at June 30, the group had a total of 194 gaming tables in Macau, of which 176 were put into operation. Macau Legend had 55 gaming tables which were put into operation at Savan Legend Casino.
Mass-market tables continued to be an important business driver for Macau Legend’s revenue in the first half of 2019, with the Legend Palace casino hotel posting a 24.3-percent increase in that segment to HKD316.2 million in the first half of 2019 from HKD254.3 million in the prior-year period.
Macau Legend’s board did not declare any interim dividend for the six months ended June 30.
The company stated in its Thursday filing it planned to “focus its effort on the continued improvement and repositioning of Macau Fisherman’s Wharf” within the Macau peninsula market. The Macau Legend said it had plans to “include new gaming and non-gaming facilities, expanded food and beverage and entertainment offerings, as well as promotional activities targeting both the tourist and mass gaming markets,” in order to boost business at Macau Fisherman’s Wharf.
In Thursday’s results, Macau Legend said it was also “considering an expansion of the hotel, gaming and non-gaming facilities” at its Lao resort.
Elsewhere, Macau Legend said it was “revisiting the overall construction plan” of its proposed Cape Verde hotel and casino complex, “in order to meet the requirements of the group’s future business strategy”. In 2016, the Cape Verde project in Africa had a price tag of EUR250 million (US$283 million).
Closer to Macau, the company closed earlier this year a deal to buy a 21.5-percent stake in a company that is developing a shopping complex on Hengqin Island, an area in mainland China next to Macau’s Cotai district. Macau Legend said in its latest filing the project was expected to commence operations by the end of the year.
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