Galaxy switches to negative earnings in Q2

Gaming operator Galaxy Entertainment Group (GEG) has announced negative adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) of HKD384 million in the second quarter, compared with a HKD575 million positive EBITDA in the first three months of the year.

In the second quarter of 2021, the gaming concessionaire had posted a positive EBITDA of HKD1.13 billion.

In a filing to the Hong Kong Stock Exchange, Galaxy Entertainment also indicated that its net revenue plunged by 41 per cent quarter-to-quarter to HKD2.4 billion in the first quarter of 2022.

With regards to the aggregate result for the first half, the company posted a net loss attributable to shareholders of HK$850 million, compared with a profit of HK$947 million in the first six months of 2021.

In a letter accompanying the filing, GEG chairman Lui Che Woo notes that “a number of cities across China experienced travel restrictions for a significant part of the first half of 2022. These restrictions on inter-provincial travel impacted visitation to Macau and in turn adversely impacted both revenue and profitability.”

The group’s balance sheet “remains liquid and healthy”, Mr Lui stresses, adding that, by the end of the first semester, cash and liquid investments were HK$29.0 billion and net cash was HK$20.3 billion and the group’s core debt remains relatively unchanged at HK$0.3 billion. “This provides us with valuable flexibility in managing operations and supporting our development initiatives,” he underlined.

GEG “well positioned” for tender

The casino concessionaire is focusing now on the public tender which will award the new gaming concessions as the deadline for submitting the bids, September 14, nears.

GEG chairman Liu Che Woo is confident in securing a new concession.

“We are well positioned to compete for one of the Macau’s gaming concessions, given our track record of introducing innovative non-gaming elements into our resorts, our strong operational history, significant investment into Macau’s economy and our substantial CSR efforts including supporting SMEs,” he said.

Looking ahead Mr Lui says the group remains “confident in the future of Macau”, while acknowledging “that further potential outbreaks of COVID-19 may impact our future financial performance.”.