Macau satellite casino operator Macau Legend says it will continue with efforts to upgrade dining and entertainment offerings at its Macau Fisherman’s Wharf precinct, including Legend Palace, despite doubts over its ability to continue as a going concern.
The company on Wednesday reported a loss of HK$182.5 million (US$23.3 million) for the six months to 30 June 2023, narrowed from a loss of HK$485.5 million (US$61.9 million) in 1H22 thanks to the recovery of its gaming and tourism businesses in Macau and Laos.
Although group-wide revenue fell by 22.7% to HK$420.2 million (US$53.5 million), including a 49.2% decrease in gaming revenue to HK$228.2 million (US$29.1 million), this was due to the cessation of its casino management contract at Landmark casino, closure of VIP tables at Legend Palace and the closure of Babylon Casino – reducing the number of gaming tables it oversees in Macau from 190 to 33. Total revenue from the company’s remaining mass market tables grew by 62.1% year-on-year to HK$163.0 million (US$20.8 million) while net win per table, per day at Legend Palace increased by 181% year-on-year, Macau Legend said.
Group-wide Adjusted EBITDA of HK$103.8 million (US$13.2 million) reversed a 1H22 Adjusted EBITDA loss of HK$160.5 million (US$20.5 million).
Nevertheless, current borrowings amount to HK$2.61 billion (US$333 million) of which HK$628.4 million (US$80.1 million) falls due for repayment within the next 12 months. Macau Legend said it has HK$94.7 million (US$12.1 million) in cash and cash equivalents as at 30 June 2023, noting “there remain circumstances that may cast significant doubt on the Group’s ability to continue as a going concern.”
The company, which recently announced plans to sell off its Laos casino Savan Legend to focus its resources on Macau, said it is currently in discussions with lenders to amend loan covenants and loan repayment schedules in the group’s favour, with a formal agreement pending.
“The Group has undertaken and will continue to undertake various mitigating measures to manage the current business environment, including a cost control program to minimize the cash outflow of non-essential items,” it said. “As a result of the uplifting of all travel and border restrictions between Macau and mainland China/Hong Kong in early 2023, the Directors expect the number of tourists traveling into Macau will significantly increase, which will in turn improve the Group’s business and financial performance.”
Despite concerns, Macau Legend outlined plans to continue focusing on the “upgrading of dining and entertainment offerings at Macau Fisherman’s Wharf, as well as the branding of this waterfront integrated attraction to welcome not only visitors from mainland China but also those from other countries over the world especially from the Southeast Asia.
“The Group is also working towards more diversification in offerings over different areas of Macau Fisherman’s Wharf, with dining options ranging from local snacks to international fine-dining and entertainment options ranging from relaxation to excitement, accompanied by a variety of shopping selections.”
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