Macau casino operator Galaxy Entertainment Group Ltd says 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.
Revenue for the period was down 61 percent, to HKD5.1 billion, said the company in a filing on Wednesday. Net gaming revenue decreased 63.5 percent year-on-year, to nearly HKD4.05 billion.
The numbers were given in a summary filed with the Hong Kong Stock Exchange. The latest numbers were against a high base for the prior year. The results in Macau came amid widespread disruption to casino operations around the world due to the novel coronavirus pandemic. The Macau market had a 15-day shutdown during the quarter.
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, the mass-market focused property next door to Galaxy Macau.
Lui Che Woo, chairman and founder of Galaxy Entertainment, said in prepared remarks that it was “difficult to quantify” the full-year financial impact of the virus. “But it will have a material impact on our financial results, and we cannot determine the duration of the pandemic,” he said in remarks accompanying the selected first-quarter numbers.
Mr Lui added: “We remain well capitalised. Having said that, we are doing our best to adjust our operations to the current business environment and effectively control costs.”
Galaxy Entertainment said in its latest filing that the group’s debt stood at HKD4.4 billion as at March 31. Cash and liquid investments amounted to HKD51.9 billion, with net cash of HKD47.5 billion. The company paid a previously-announced special dividend of HKD0.45 per share on April 24.
In his remarks, Mr Lui said that “virtually all team members made voluntary contributions” to help control costs.
“At Galaxy Entertainment we have tried to spread the impact of Covid-19 fairly across all team members as we prefer not to engage in redundancies,” said Mr Lui.
Galaxy Entertainment said on Wednesday that VIP junket rolling chip turnover plummeted 66.5 percent year-on-year in the three months to March 31. Such turnover group-wide was nearly HKD68.17 billion, compared to just above HKD203.57 billion in first-quarter 2019.
The casino group’s first-quarter 2020 mass table “drop” – the amount of cash wagered at mass tables and cash chips purchased at the casino cage for such games – declined by 63.3 percent year-on-year. Such mass “drop” was about HKD11.19 billion, compared to HKD30.46 billion a year earlier.
First-quarter electronic gaming volume stood at nearly HKD7.12 billion, down 60.0 percent from the prior-year period.
The Galaxy Macau property’s first-quarter net revenue was HKD3.5 billion, down 62 percent year-on-year. The Cotai venue is the primary contributor to Galaxy Entertainment’s revenue and earnings. The property’s adjusted EBITDA was HKD329 million, down 89 percent year-on-year.
Galaxy Entertainment’s first-quarter results “contained no surprises,” said brokerage JP Morgan Securities (Asia Pacific) Ltd in a Wednesday memo. The group’s headline EBITDA “was better than JP Morgan estimate/consensus of about HKD220 million”, with a “favourable luck” of HKD84million.
The gaming operator said in its commentary on the quarterly numbers that it had “almost completed” the previously-announced HKD1.5-billion renovation programmes respectively in Galaxy Macau and StarWorld Macau, and was now “reviewing additional enhancement opportunities”.
Galaxy Entertainment said additionally that it continued with development work for Phases 3 and 4 of Galaxy Macau, but that schedules for completion could be affected.
“We will try to maintain our development target, however due to Covid-19, development timelines may be impacted. At this point we cannot quantify the impact but we will endeavour to maintain our schedule,” said the company.
Galaxy Entertainment had mentioned in a February statement that it was aiming at a first-half 2021 launch for a portion of Phase 3 of its Galaxy Macau casino resort. 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.
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