Gaming and hotel services firm Macau Legend Development Ltd reported on Tuesday a net loss of just above HKD688.6 million (US$88.5 million) for the first six months of 2021, an increase of 25.2 percent from the prior-year period. That was on revenue that actually rose by 44.9 percent year-on-year, to HKD527.4 million, according to a filing to the Hong Kong Stock Exchange.
The company’s costs increased by 17.9 percent year-on-year, to nearly HKD698.0 million. The firm recorded an HKD241-million loss in first-half 2021, due to an impairment of non-financial assets related to the group’s investment in the development of a hotel and casino complex in Cape Verde, it said.
Macau Legend blamed the wider loss on “social distancing measures and travel restrictions” imposed by government authorities as countermeasures against the Covid-19 pandemic. Such measures, the firm said, had “severely” affected “the tally of visitor arrivals to Macau and Laos” during the reporting period.
The firm runs three casinos in Macau – Landmark, Babylon and Legend Palace (pictured) – under a so-called services agreement with Macau licensee SJM Holdings Ltd. The company also has a tourism complex called Macau Fisherman’s Wharf, a waterfront area close to the Outer Harbour Ferry Terminal on Macau peninsula.
Macau Legend has additionally invested in the Savan Legend casino resort in Laos, which was “temporarily closed during May 2021” due to the pandemic.
The group’s gaming revenue for the six months to June 30 rose by 46.7 percent year-on-year, to approximately HKD421.1 million. The Landmark Casino was the biggest reason behind the group-wide growth in gaming revenue, as the property posted an HKD123.3-million increase in gaming revenue.
In the first half of 2021, gaming revenue at Savan Legend casino declined by approximately HKD25.7 million from a year earlier. VIP tables at the property “remained closed” during the six months ended June 30, 2021, stated the firm.
The group’s adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) were negative by HKD132.9 million, a 38.2-percent improvement over the last corresponding period, when it recorded an EBITDA loss of approximately HKD215.1 million.
The firm’s directors decided there would be no interim dividend.
Macau Legend underwent a board rejig last year, after Macau casino junket boss Levo Chan Weng Lin upped his investment in the firm to 33.19 percent.
Macau Legend had net current liabilities of nearly HKD2.74 billion as of June 30, 2021, compared to HKD734.9 million at the end of 2020. The company said it had “sufficient working capital to satisfy its present requirements for at least 12 months from the end of the reporting period.”
But the firm said it was negotiating with banks a “restructuring [of] the repayment schedule of the existing bank borrowings,” as well as seeking an “additional credit facility”.
At the end of June, Macau Legend had an unutilised credit facility of HKD100.0 million from its lenders, from a total facility amount of HKD2.3 billion.
Outside of the reporting period, the firm said it obtained in August a waiver of a loan covenant from the banks “for a period of 12 months up to and including 30 June 2022,” as well as an extension of repayment of the first principal amount of HKD95.0 million, which was due on September 4, 2021.
Macau Legend also said the company’s chief executive Mr Chan agreed in August “to provide financial support” to the group to ensure the firm “will continue to operate as a going concern.”
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Amount that each Macau casino operator paid for the circa six-month extension of their respective contract