Galaxy Entertainment said it’s confident for the future in Macau despite swinging to a loss in 2Q22 on Covid restrictions.
The operator posted a group adjusted EBITDA loss of HK$0.4 billion, compared with a profit of $1.1 billion in the same period of last year and a profit of $0.6 million in the first quarter.
Galaxy is one of the six operators in Macau and is currently rebidding for its concession contract. Galaxy Chairman Lui Che Woo said in the earnings statement that the group is well-positioned given its track record of introducing innovative non-gaming elements into its resorts, its strong operational history, significant investment into Macau’s economy and its substantial CSR efforts including supporting small-and-medium-sized enterprises.
The re-tender process is expected to be completed by the end of this year.
Galaxy’s 2Q22 results were hard hit by China’s zero-Covid policy, with tight travel restrictions in place through most of the quarter due to outbreaks on Mainland China. Subsequent to the close of the quarter, the government ordered the closure of all casinos in Macau for 11 days due to the city’s worst outbreak since the beginning of the pandemic.
Group net revenue fell 56 percent from the year-ago quarter to $2.4 billion and was down 41 percent sequentially.
Galaxy said it was proceeding with the next development stages of the resort, with Cotai Phase 3 effectively completed. It is now working on Phase 4, which will complete its resort in Macau. Both Phases 3 and 4 will focus on non-gaming activities, targeting MICE and family-friendly entertainment.
The group said it will open its new Raffles hotel at Galaxy Macau when the prevailing market conditions allow.
Given the ongoing impact of Covid, Galaxy said it would not be paying a dividend. It said its balance sheet remains healthy with cash and liquid investments at the end of the quarter of $29 billion and net cash of $20.3 billion. Core debt was $0.3 billion.
Galaxy is regarded by analysts as having the strongest balance sheet amongst Macau operators.
For the six-month period, gross gambling revenue was $4.60 billion, less than half of the $9.47 billion posted in the prior-year period.
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