Galaxy revenues plummet in first half of 2020

Galaxy's chairman said it would be
Galaxy's chairman said it would be "premature" to comment on how quickly the market may recover.

All of the group’s casinos showed losses in the first six months the year, including Galaxy Macau, which reported net revenues of US$490 million.

Macau.- Galaxy Entertainment Group has posted a net loss of HK$2.86 billion (US$369 million) for first half of 2020, compared with a profit of HK$6.68 billion (US$861.6 million) for the same period last year.

Revenues dropped 76.3 per cent to HK$6.22 billion (US$802.5 million). The group’s adjusted EBITDA for the first half of the year was –HK$1.08 billion (US$139.3 million), down from HK$8.3 billion (US$1,070 million) in the same period in 2019.

All of the group’s casinos and resorts posted negative results during the six months that ended June 30. Its main casino, Galaxy Macau, showed net revenue of HK$3.8 billion (US$490 million), down 80 per cent year-on-year.

Company Chairman Lui Che Woo said: “We are pleased that Macau and Guangdong have taken the critical step in creating a travel bubble followed most notably, by the reinstatement of the Individual Visit Scheme (IVS) and group travel for Zhuhai Hukou residents and Zhuhai Resident Permit holders to visit Macau effective yesterday.

“Despite these important positive early steps, it is premature to comment on how quickly the market may recover. Going forward we expect to experience further head winds from the pandemic, which will have an adverse impact on our financial performance. However in the medium to longer term, we continue to remain optimistic in the outlook for Macau in general and GEG specifically.”

For the second quarter of 2020 (Q2), Galaxy reported HK$1.1 billion (US$148.7 million) in net revenue, 91 per cent less than the same period in 2019, and a 77 per cent quarter-to-quarter decrease.

The group’s mass table gross gaming revenues also dropped by 98 per cent year-on-year to HK$138 million (US$17.8 million) in Q2. The VIP segment totalled HK$315 million (US$40.6 million), also a 98 per cent drop.

As a result of this financial position, the board recommended suspending dividend payments.

The group said the 3 and 4 phases of construction at its Cotai resort were ongoing but that given the Covid-19 crisis “timelines may be impacted.”

The new areas will include 3,500 hotel rooms, including family and premium high-end rooms and villas, 400,000 square feet of MICE space, a 500,000 square foot 16,000-seat multi-purpose arena, among others.

Galaxy is also exploring the concept plan for a new lifestyle resort on the island of Hengqin and has confirmed interest in developing an integrated resort in Japan.

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