Third-quarter net revenue at Macau casino operator Galaxy Entertainment Group Ltd declined 16.1 percent sequentially to HKD2.03 billion (US$259.1 million). Such revenue was down 52.5 percent from the prior-year period.
The firm gave the information in unaudited performance highlights, filed with the Hong Kong Stock Exchange on Thursday.
The group’s third quarter adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) were negative to the tune of HKD581 million, compared with negative EBITDA of HKD384 million in the preceding quarter.
The firm had reported positive adjusted EBITDA of HKD503 million for the third quarter of 2021.
The company chairman, Lui Che Woo, noted in remarks in a press release that “elevated Covid-19 related travel restrictions imposed in the second quarter flowed into the third quarter and even resulted in the closure of casinos [in Macau] for 12 days during the quarter”.
He was referring to a June community outbreak of Covid-19 in Macau, that led to the closure of all gaming venues in the city in July. The heightened restrictions and casino closure “impacted visitation, revenue and profitability,” stated Mr Lui.
The group’s net gaming revenues in the third quarter fell 33.1 percent sequentially, to HKD821 million. Such revenues were down 71.8 percent from the HKD2.91 billion recorded in the third quarter of 2021.
Rolling chip turnover for the period was HKD2.78 billion, down 91.7 percent from the prior-year period, and a decline of 23.7 percent from the second quarter this year. Quarterly mass-market table drop fell by 67.3 percent year-on-year, to HKD3.30 billion; it was down 28.4 percent sequentially.
At the Galaxy Macau integrated resort (pictured), the “primary contributor” to the group’s earnings, total third-quarter net revenue was HKD1.07 billion, down 25.3 percent quarter-on-quarter, and a decline of 62.2 percent from a year earlier.
Adjusted EBITDA at Galaxy Macau was a negative HKD299 million for the three months to September 30, compared to a positive figure of HKD454 million a year ago. The property had recorded negative adjusted EBITDA of HKD188 million for the second quarter this year.
Galaxy Entertainment said the group’s balance sheet remained “liquid and healthy”. As of September 30, cash and liquid investments amounted to HKD22.5 billion and the group’s net cash was HKD19.3 billion. That compared with cash and liquid investments of HKD29.0 billion and net cash of HKD20.3 billion as of end-June.
Aggregate debt was HKD3.2 billion at the end of September, which the firm said primarily reflected its “ongoing treasury yield management initiatives where interest income on cash holdings exceeds corresponding borrowing costs”. It added that “core debt remained minimal,” at about HKD300 million.
In its latest update, the company said Phase 3 of Galaxy Macau was “effectively completed”, and it continued to progress with Phase 4 of the complex.
Galaxy Entertainment had mentioned previously that Phase 3 activation would be tied to “prevailing conditions”. Goldman Sachs (Asia) LLC suggested in an October note that the opening of Phase 3 for Galaxy Macau was unlikely “until at least 2023”.
