GGRAsia – Macau Legend 3Q revenue higher after Laos acquisition

Macau Legend 3Q revenue higher after Laos acquisition

Nov 09, 2016 Newsdesk Latest News, Macau, Rest of Asia, Top of the deck

Macau casino services firm Macau Legend Development Ltd reported revenue of HKD377.6 million (US$48.7 million) for the third quarter of 2016, up by 1.9 percent from the prior-year period.

The results included one full month of operations of a casino property in Laos, until recently known as Savan Vegas Hotel and Entertainment Complex (pictured). The property has been rebranded Savan Legend, according to Tuesday’s filing.

Macau Legend announced in early September that it had “formally taken over” the management and operation of the casino scheme in Laos. The company paid US$42 million for the right to operate the property.

Savan Legend contributed HKD25.3 million of reported revenue during one month of operations in September, said Macau Legend in a filing to the Hong Kong Stock Exchange.

The company reported adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) of HKD75.5 million, an increase of 1.2 percent from the third quarter of 2015. Savan Legend contributed with adjusted EBITDA of HKD14.2 million during the month of September.

In its selected highlights for the third quarter, Macau Legend did not disclose information regarding profit or loss. The company posted a net loss of HKD175.3 million for the first half of 2016, according to its interim report.

Total gross gaming revenue (GGR) from gaming tables – including VIP tables where the gaming operations are outsourced to other parties – decreased by 13.5 percent year-on-year to approximately HKD575.3 million in the three months to September 30, said Macau Legend. When excluding outsourced VIP table operations, the firm said aggregate GGR increased by 12.8 percent to HKD451.6 million.

New Legend – Macau Legend’s self-run VIP operation – contributed HKD127 million in GGR to the firm during the third quarter of 2016, an increase of 36.1 percent from a year earlier. Gross gaming revenue contributed by Savan Legend amounted to HKD20.4 million.

Macau Legend developed and operates Macau Fisherman’s Wharf, including two hotels and a casino. The firm also runs the Pharaoh’s Palace Casino and the hotel at the Landmark Macau. The casinos are operated under the casino licence of Macau gaming operator SJM Holdings Ltd.

“Our overall performance in the third quarter of 2016 has improved when compared with previous quarter,” Macau Legend co-chairman and chief executive David Chow Kam Fai said in a statement accompanying the firm’s third quarter highlights.

“There appears to be some stability in the overall business environment in Macau. While the profile of the visitors to Macau is clearly changing, we remain cautiously optimistic for the remainder of the year and looking forward to 2017,” he added.

Development pipeline

In March, Macau Legend announced it had signed a letter of intent to sell its Landmark Macau casino hotel. But in September, the company said the letter of intent had expired without a deal being concluded. The firm additionally said it was in negotiations with another potential buyer.

Construction of Legend Palace Hotel – the third hotel to be built within Macau Fisherman’s Wharf – “is expected to be completed by the end of 2016 with a soft opening,” said Macau Legend. The hotel is to start operations with the new casino in early 2017, the firm added.

Macau Legend is also building a canopy on the main street of Macau Fisherman’s Wharf. It said construction work is due “to be completed by the end of 2016”. The company further stated it would be adding restaurants, shops and entertainment facilities at Macau Fisherman’s Wharf “through the first half of 2017”.

Mr Chow said Macau Fisherman’s Wharf was “significantly disrupted” by the installation of the canopy and other major construction activities in the three months to September 30.

“However, with the expected completion and soft opening at our 5-star Legend Palace Hotel at the end of 2016, and [with] the other improvements to our facilities at Macau Fisherman’s Wharf completed in coming months, we expect the overall performance of our non-gaming businesses to pick up,” he added.

Macau Legend began construction earlier this year of a EUR250-million (US$275.7 million) casino resort in the African island nation of Cape Verde. In Tuesday’s filing, the firm said it anticipates starting operations “of a temporary casino and online gaming businesses [in Cape Verde] by the fourth quarter of 2017”. Construction of the casino resort is due to be completed by 2019, the firm added.

“We remain very confident about our project in Cape Verde and are encouraged by the continued growth in tourist arrivals as well as the new resort projects and facilities being introduced to this market,” said Mr Chow.