Asian casino operator Galaxy Entertainment Group (GEG) saw revenue for the six months to 30 June drop 76.3% with the operator expecting further headwinds from the ongoing impact of novel coronavirus (Covid-19) on its Macau venues.
The group’s gross gaming revenue came to $6.01bn (£591.7m/€654.5m/$774.9m), down 80.4%. After deducting commission payments and bonuses, net gaming revenue came to €4.32bn, down 80.6%.
The business made an additional $679m from its non-gaming division, down 74.4%, and a further $1.22bn from its construction materials division, which represented a drop of 8.3%. This resulted in total group revenue of €6.22bn, down 76.3%.
Of this $6.01bn in GGR, $2.95bn came from regular table game customers, down 79.8%, with players wagering $11.97bn, while $2.79bn of GGR, an 81.1% decline, came from VIPs, who staked $74.87bn. A further $261m was made through electronic gaming, down 78.3%, on stakes of $8.48bn.
GEG’s revenue from its Galaxy Macau property came to €3.84bn, down 79.6%.
Galaxy Macau made HKD$3.26bn in net gaming revenue for the half-year, down 80.3%, from gross gaming revenue of $4.37bn, down 80.0%. The business earned an additional $373m through hotel, food and beverage revenue (down 77.6%) and €202m from malls (down 66.0%).
Galaxy earned $1.08bn, down 81.1%, more in revenue from StarWorld Macau. Of this total, $1.02bn came from net gaming revenue, an 81.4% decline, while hotel and food revenue fell 75.9% to $54m and mall revenue fell 70.3% to $8m. Gross gaming revenue came to $1.30bn, down 82.7%.
Broadway Macau, meanwhile, saw revenue fall 84.9% to $23m in gaming as its lack of a VIP component led to a particularly heavy decline, of 74.0% to $32m in hotels and 56.6% to $10m in malls.
The operator did not break down expenses, but said its loss before tax, interest, depreciation and amortisation was $1.09bn, after the business posted an $8.38bn profit in this area a year prior. Galaxy Macau made an EBITDA loss of $848m, StarWorld $202m and Broadway $97m.
Dr. Lui Che Woo, chairman of the Galaxy Entertainment Group, said cutting costs has been a priority because the the Covid-19 crisis, though the business was keen to avoid cutting too deep.
“During this period of very low revenue our focus has shifted from revenue generation to effective cost control,” Lui said. However, it is important to not cut costs excessively and therefore adversely impact our ability to deliver upon customer service standards when business returns.”
Looking only at the second quarter of 2020, Galaxy made revenue of HKD $1.15bn, down 91.2% as strict restrictions caused by the novel coronavirus (Covid-19) crisis had a drastic impact on its business.
Net gaming revenue was down 97.5% to just $276m, as construction materials, which saw revenue grow 57.3% to $747m, became Galaxy’s largest division. Non-gaming revenue fell 76.3% to $130m.
Galaxy’s net gaming revenue of $276m came on gross gaming revenue of $485m, down 96.8%. VIPs made up the majority of gross gaming revenue at $315m, down 95.7%, while other table game revenue fell 98.1% to $138m. Electronic gaming revenue was down 94.7% to $32m.
Galaxy Macau brought in revenue of $311m for the quarter, down 96.7%, including net gaming revenue of $200m – a 97.7% decline – as gross gaming revenue fell 97.1% to $329m. StarWorld Macau's revenue plummeted 97.1% to $81m, while Broadway Macau's contribution was down 91.2% at $12m.
The group’s EBITDA loss totalled $1.37bn for the quarter, compared to a $4.32bn profit in 2019.
Galaxy Macau’s EBITDA loss came to $1.78bn, while StarWorld made a loss of $306m, and BroadWay Macau $52m.
Across all operators, casino revenue in Macau for the first half of 2020 totalled MOP33.72bn (£72.2m/€79.8m/$89.7m), down 77.4% year-on-year. Almost two thirds (MOP22.13bn) of this revenue was earned in January alone.
This low revenue across the island has been mostly caused by tight travel restrictions to and from Macau because of Covid-19. Last month, the Chinese province of Guangdong started the easing of these restrictions, lifting the mandatory 14-day quarantine for all people entering from Macau.
“First and foremost, the Macau government continues to perform admirably throughout the pandemic with proactive and decisive leadership and generating community support,” Lui said. “They are clearly focused on public health and safety as well as economic and social stability.”
Lui said he could not be sure how the market would recover, however.
“It is premature to comment on how quickly the market may recover,” Lui said. “Going forward we expect to experience further headwinds from the pandemic, which will have an adverse impact on our financial performance. However in the medium to longer term, we continue to remain optimistic in the outlook for Macau in general and GEG specifically.”