JP Morgan analysts say the company could survive for more than six years with near zero revenue.<\/p>\n\n\n\n\n\n\n\n
Macau.- Casino operator Galaxy Entertainment Group Ltd<\/strong><\/em> has “enough financial liquidity to survive” in the Macau market during the Coronavirus pandemic, according to a report from JP Morgan Securities (Asia Pacific) Ltd.<\/p>\n\n\n\n The report also noted that Galazy had enough reserves to withstand \u201cnear-zero revenue\u201d for as long as six years. <\/p>\n\n\n\n The report also noted that Macau’s other gaming operators have \u201cample liquidity to survive this unprecedented period of \u2018near-zero revenue\u2019 for over a year,\u201d analysts DS Kim, Derek Choi and Jeremy An wrote.<\/p>\n\n\n\n They estimate that Galaxy Entertainment has fixed operating costs of US$3million per day \u2013 which the brokerage projected as approximately US$90million per month; and maintenance capital expenditure (capex) of US$11million per month. <\/p>\n\n\n\n The company owns and operates two flagship properties in Macau \u2013 Galaxy Macau on Cotai, and StarWorld Hotel on the city\u2019s peninsula \u2013 as well as smaller venues in both districts.<\/p>\n\n\n\n In its full-year results published in late February, Galaxy Entertainment said it had net cash of HKD51.7billion (nearly US$6.7billion) and only HKD600 million in debt.<\/p>\n\n\n\n The group does have financial commitments on Phases 3 and 4 of Galaxy Macau, and also has ambitions to acquire a casino licence in Japan.<\/p>\n\n\n\n Regarding all of Macau’s JP Morgan noted: \u201cThe industry can stay EBITDA [earnings before interest, taxation, depreciation and amortisation] break-even at the gross gaming revenue run-rate of around MOP300 million [US$37.6million] per day, and cash-flow break-even (post interest cost and maintenance capex) at MOP400-million levels.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":" JP Morgan analysts say the company could survive for more than six years with near zero revenue.<\/p>\n","protected":false},"author":2,"featured_media":1963,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"is_press_release":false,"is_interview":false,"is_opinion":false,"focusai_summary":"According to a JP Morgan report, Galaxy Entertainment Group possesses substantial financial liquidity, enabling it to withstand near-zero revenue in Macau for up to six years. The report also indicates that other Macau gaming operators have sufficient liquidity for over a year under similar conditions, with the industry's cash-flow break-even point estimated at MOP400 million GGR per day. This highlights the robust balance sheets within the Macau concessionaire segment amidst unprecedented market disruptions.","focusai_entities":"JP Morgan Securities (Asia Pacific) Ltd, Galaxy Entertainment Group Ltd, DS Kim, Derek Choi, Jeremy An, Galaxy Macau, StarWorld Hotel","focusai_location":"Macau, Japan, Cotai","focusai_target_profile":"ceo_executive (1.0), regulator (0.7), operator_casino (1.0), investor_analyst (1.0), supplier_vendor (0.7), journalist_researcher (0.9)","focusai_suggestions":[{"label":"Macau GGR Recovery?","query":"What GGR run-rate is required for Macau's integrated resorts to achieve cash-flow positive operations, and how does this compare to pre-pandemic levels?"},{"label":"Galaxy's Japan Strategy?","query":"How might Galaxy Entertainment Group's substantial liquidity influence its strategic positioning and capital allocation for a potential Japan casino license acquisition?"}],"footnotes":""},"categories":[160,16338,163],"tags":[12436,257],"class_list":["post-5357","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-asia-pacific","category-east-asia-news","category-finance-news","tag-casinos","tag-macau"],"_links":{"self":[{"href":"https:\/\/focusgn.com\/asia-pacific\/wp-json\/wp\/v2\/posts\/5357","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/focusgn.com\/asia-pacific\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/focusgn.com\/asia-pacific\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/focusgn.com\/asia-pacific\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/focusgn.com\/asia-pacific\/wp-json\/wp\/v2\/comments?post=5357"}],"version-history":[{"count":5,"href":"https:\/\/focusgn.com\/asia-pacific\/wp-json\/wp\/v2\/posts\/5357\/revisions"}],"predecessor-version":[{"id":777021718,"href":"https:\/\/focusgn.com\/asia-pacific\/wp-json\/wp\/v2\/posts\/5357\/revisions\/777021718"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/focusgn.com\/asia-pacific\/wp-json\/wp\/v2\/media\/1963"}],"wp:attachment":[{"href":"https:\/\/focusgn.com\/asia-pacific\/wp-json\/wp\/v2\/media?parent=5357"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/focusgn.com\/asia-pacific\/wp-json\/wp\/v2\/categories?post=5357"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/focusgn.com\/asia-pacific\/wp-json\/wp\/v2\/tags?post=5357"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}