Casino services firm Macau Legend Development Ltd reported a year-on-year decline of 55.0 percent in adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) during the three months ended September 30, to HKD74.6 million (US$9.6 million).
The Hong Kong-listed firm said in a filing on Wednesday that total table gross gaming revenue for the period decreased by 59.1 percent to HKD665.1 million. Market wide in Macau, accumulated gross gaming revenue (GGR) for the July to September period was down 34.4 percent year-on-year.
Macau Legend runs two casinos in Macau: Babylon Casino at Macau Fisherman’s Wharf; and Pharaoh’s Palace Casino at the Landmark Macau, both on Macau peninsula.
New Legend – the firm’s self-run VIP operation – contributed HKD93.3-million in gross gaming revenue during the period, an increase of 64.0 percent from a year earlier. The firm said the performance was fuelled by a higher win rate and the expansion of operations to Babylon Casino.
Macau Legend reported an overall revenue decline of 18.0 percent year-on-year in the third quarter of 2015, to HKD370.5 million. Non-gaming revenue was up 10.0 percent, to HKD140.9 million.
The unaudited financial information released by Macau Legend in the filing did not include profit for the period.
“Despite a challenging business environment… our overall performance in the third quarter of 2015 has seen some improvements from the second quarter,” said chief executive David Chow Kam Fai (pictured) in a prepared statement.
He added: “Construction of superstructure of the second new hotel project at Macau Fisherman’s Wharf, Legend Palace Hotel, has commenced in July 2015 with an expected construction completion in the second quarter of 2016. Upon completion, we intend to expand our self-run VIP operation to this five-star luxury hotel.”
The firm is facing some public opposition to its plans to increase the projected height – from 60 metres (197 feet) to 90 metres – of Legendale Hotel, a new hotel due to be constructed by the company at Fisherman’s Wharf. Macau Legend is still waiting for government approval to start construction, but management has already warned that the approval delays are likely to impact the initial target of a opening by the end of 2017.
Macau Legend stated in Wednesday’s filing it had “recently conducted a manpower review to evaluate the effectiveness and efficiency of its human resources”. As a result of the review, a total of 132 employees – representing approximately 3.9 percent of its workforce – retired during the past two months. “Total amount of the monthly salary of the relevant employees was approximately HKD2.2 million and total amount of one-off compensation of long service payment to these employees was approximately HKD8.7 million,” the firm stated.
Macau Legend claimed in the filing that it had a total of 185 gaming tables at September 30, but only 139 units were in operation. The company provided no details on why the remaining tables were not being used.
The firm was granted 35 additional live gaming tables by the Macau government in October last year, but these had not yet been put into operation by June 30, according to previous filings from Macau Legend. The company’s table allocation comes via a local unit of SJM Holdings Ltd, which supplies the gaming licence for Macau Legend to operate its existing casino properties.
Macau Legend in July announced a deal with the government of Cape Verde to develop a casino resort in the Western African country. The HKD2.15 billion project is expected to be completed in three years.
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Amount that each Macau casino operator paid for the circa six-month extension of their respective contract