Macau casino operator Galaxy Entertainment Group Ltd says business has been “encouraging” following the relaxation on October 19 of travel restrictions between Macau and Zhuhai, in neighbouring Guangdong province, said a Thursday note from brokerage Sanford C. Bernstein Ltd.
The information was based on a briefing to analysts by Galaxy Entertainment’s management, following its third-quarter results highlights issued in Hong Kong on Thursday.
“Galaxy saw business immediately bounce back to the high level before the July [Covid-19] outbreak, in both casino and non-gaming,” said the note from analysts Vitaly Umansky, Louis Li, and Kelsey Zhu.
The brokerage cited Galaxy Entertainment’s management as saying that October was “almost breakeven”, with just about 10 days of normal operation. The casino firm said previously that it would be able to breakeven at 20 percent of the levels of gross gaming revenues in 2019.
“The third quarter’s cash balance was down HKD5 billion [US$641.7 million] versus the second quarter, as Galaxy continues investing in Phase 3 and 4,” of Galaxy Macau (pictured) on Cotai, via “capital expenditure of HKD1.4 billion to HKD1.5 billion,” said the note.
Sanford Bernstein said additionally that the Galaxy International Convention Centre, part of Phase 3 of the Galaxy Macau casino resort, was “completed and ready to launch.” But it added: “Galaxy remains prudent and will launch it in prevailing market conditions in 2022, together with the Raffles and Andaz hotels and the rest of features in Phase 3.”
In Thursday’s update, Galaxy Entertainment modified the language used to describe the opening in 2022 of the Raffles-branded hotel that is a key portion of Phase 3 of the Galaxy Macau resort. The firm said it aimed to open Raffles, a 450 all-suite tower, “in 2022 aligned with prevailing market conditions”.
In its first-quarter highlights in May, Galaxy Entertainment had mentioned the “later part of 2021 or early 2022” for the launch of Raffles. In the first-half and second-quarter results, it mentioned simply a target of “early 2022”.
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Amount that each Macau casino operator paid for the circa six-month extension of their respective contract