Macau-based casino and entertainment operator Macau Legend Development Ltd has issued a profit warning for the year ended 31 December 2020 on expected losses totaling up to HK$2 billion (US$258 million).
Macau Legend, which operates casinos at Macau’s Legend Palace and Babylon under license from SJM, as well as Savan Legend in Laos and a shopping complex in Hengqin, said Thursday it expects its loss attributable to equity holders to range from HK$1.9 billion to HK$2.0 billion for the year ended 31 December 2020, widened from a loss of HK$190 million in 2019.
The loss is “mainly attributable to 1) the significant decrease in revenue as a result of the social distancing measures and travel restrictions imposed by government authorities in response to the COVID-19 pandemic which have severely declined the tally of visitor arrivals to Macau and Laos during 2020; and 2) the impairment losses recognized for certain business units due to the adverse changes in economic situation under COVID-19 pandemic,” it said.
The substantial loss comes despite Macau Legend implementing what it describes as “various mitigating measures to manage the current environment, including active measures to control its operating costs and expenses.”
Final results are due to be published before the end of the month.
While not surprising given the challenging operating environment of the past year, the profit warning suggests Macau Legend’s recently appointed Co-Chairman and Executive Director, Tak Chun Group CEO Levo Chan, has his work cut out returning the company to profit in the coming years.
Chan acquired a 20.65% stake in Macau Legend last September, later increased to 33.19% via a mandatory cash offer, for a combined HK$2.09 billion (US$269 million).
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