Despite improvements Macau Legend losses expand in H1

Local gaming company Macau Legend has seen its losses expand in the first half of this year to HK$704.9 million (US$90.6 million), the company’s latest financial report indicates.

Although the company’s revenues increased by 55 per cent year-on-year to HK$527.4 million as of June, expenses for sales and services also jumped by 18 per cent to HK$697.9 million.

The group’s gaming revenue still saw a considerable 64 per cent year-on-year improvement to HK$410 million, with HK$344.5 million coming from mass tables.

Macau Legend’s revenue from gaming services consisted of service income received from SJM for services and facilities provided relating to mass market tables, VIP tables and slot machines and casino operations in Laos.

The Group had a total of 194 gaming tables in Macau and 7 in Laos as of June 30 of this year.

The improvement in gaming results was mainly due to the partial recovery in 2021 on COVID-19 pandemic which caused an increment in the reported revenue contributed from Legend Palace Casino of approximately HK$17.3 million, plus HK$19.1 million from Babylon Casino, and HK$123.3 million from Landmark Casino.

However, the results were offset by a HK$25.7 million revenue loss by Savan Legend Casino in Laos, which was closed from April to June, with VIP tables closed during the whole first half of the year.

The service agreement between Macau Legend and SJM is due to expire on 26 June 2022 when the term of SJM’s concession agreement with the Macau government ends.

Non-gaming revenue generated by Macau Legend between January and June also went up 38 per cent year-on-year to HK$106.3 million

The group’s Adjusted EBITDA for the six months amounted to HK$132.9 million in losses, representing an improvement of approximately HK$82.2 million.

‘The pandemic in Macau begins to stabilise in the first half of 2021, consumption desires of Macau locals gradually resumed. Given the rising visitation, the Group has recorded a significant improvement on Macau food and beverage revenue during the period when comparing to the same period last year,” Executive Director and CEO, Levo Chan Weng Lin said in the financial report.

‘Soda Port, our restaurant that commenced operations at the end of last year, also started to contribute profit to the Group during the period […] the Group will continue to introduce more non-gaming tourism activities and facilities in the premises included reiterating the Legend Boulevard into a leisure avenue equipped with world-wide dining and comprehensive entertainment facilities’.

Levo Chan officially replaced Melinda Chan Mei Yi as Macau Legend Development’s CEO in December, 2020 following a reshuffle in the company’s shareholding structure following investment by the Tak Chun Executive Director.

‘With the momentums generated by new investors and management joining us in 2020, the Group has been improving its management and reporting structure. Simultaneously, special teams have been set up for strategic planning, comprehensive data analysis, budget and resources allocation. The management also made several strategic moves with main focus on marketing and service product quality under this pandemic,’ Chan noted.

The re-design of the construction of the hotel is still on-going in order to meet the height requirements of Macau authorities with no update provided.

The occupancy rate for PONTO, the large-scale shopping complex in Hengqin held by a subsidiary of Lai Ieng Investment, has reached about half by the end of the period, with tenants including cinema, gymnasium and restaurants of different scales.

The group’s construction plan for its Cape Verde hotel and casino complex is also currently ‘being revisited’, with construction works for Phase I close completion and works on Phase II targeted to commence in a later stage once the construction plan and design works are finalised.

Macau Legend also held HK$2.1 billion in secured and guaranteed bank borrowings as of the end of June.