Macau casino operator Galaxy Entertainment Group Ltd reported negative adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) of HKD1.37 billion (US$176.8 million) for the second quarter of 2020, compared to positive HKD4.33 billion a year earlier. The company said travel restrictions linked to efforts to contain the further spread of Covid-19 had resulted in the group recording “minimal revenue” during the period.
Galaxy Entertainment had reported an adjusted EBITDA of HKD283 million for the opening quarter of 2020.
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.
Net revenue for the three months to June 30 was down 91 percent year-on-year, to just above HKD1.15 billion, said the company in a filing on Thursday. Such revenue was down 77 percent sequentially, stated the firm.
The group’s aggregate gross gaming revenue (GGR) in the second quarter stood at HKD485 million, a decline of 97 percent from the prior-year period, and down 91 percent from the preceding quarter.
Total VIP GGR for the period was HKD315 million, down 96 percent year-on-year. Rolling chip volume fell by 96 percent, to just above HKD6.70 billion.
Aggregate mass table GGR and revenue from the electronic segment were down 98 percent and 95 percent, respectively, to HKD138 million and HKD32 million.
The latest numbers were against a high base for the prior year. This year’s second quarter results in Macau came amid widespread disruption to casino operations due to the novel coronavirus pandemic.
Lui Che Woo, chairman and founder of Galaxy Entertainment, said in prepared remarks that the second quarter “continued to be a difficult period for the community and businesses globally”.
“Covid-19 had an adverse impact on our financial results in the second quarter and in the first half of 2020, as mainland China, Hong Kong and Macau faced travel restrictions and social distancing,” he stated. “These restrictions resulted in a significant reduction in visitor arrivals and subsequent decline in revenue,” he added, saying that the negative EBITDA result reflected “minimal revenue and ongoing staff costs” during the period.
Cautious on recovery
Galaxy Entertainment’s second-quarter results “contained no major surprises, as the level of EBITDA is essentially operational expenditure burn (plus little revenue and luck impact),” said brokerage JP Morgan Securities (Asia Pacific) Ltd in a Thursday memo.
For the first half of 2020, Galaxy Entertainment reported net revenue of HKD6.22 billion and adjusted negative EBITDA of nearly HKD1.09 billion. The group posted a net loss of nearly HKD2.86 billion for the six months to June 30, compared with a profit of HKD6.68 billion a year earlier.
The firm said its board had decided not to declare a dividend “given the ongoing impact of Covid-19.”
In his remarks accompanying the second-quarter numbers, Mr Lui said the group was pleased to see the reinstatement of tourist visas from mainland China to Macau.
“Despite these important positive early steps, it is premature to comment on how quickly the market may recover,” said the group’s chairman. “Going forward we expect to experience further headwinds from the pandemic, which will have an adverse impact on our financial performance.”
He added: “However, in the medium to longer term, we continue to remain optimistic in the outlook for Macau in general and Galaxy Entertainment specifically.”
In Thursday’s filing, Galaxy Entertainment said the timelines 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.
The group’s chairman said in his comments that Galaxy Entertainment was to push forward with its plans for Japan, while acknowledging that timelines for the opening of casino resorts in that nation could also “be impacted” by the health crisis related to Covid-19. “However, we can adjust accordingly, and we remain committed to our Japan expansion plans,” said Mr Lui.
Galaxy Entertainment said in its latest filing that the group’s debt stood at HKD6.2 billion as at June 30. Cash and liquid investments amounted to HKD49.8 billion, with net cash of HKD43.6 billion.
Apr 16, 2021Macau’s VIP gross gaming revenue (GGR) in the first quarter of 2021 reached nearly MOP9.13 billion (US$1.14 billion), up 19.7 percent sequentially, according to data released on Friday by the...
Apr 16, 2021
Tax revenue collected by the Macau government from the city’s gaming industry in the first three months of 2021