Galaxy Entertainment's net falls 7pc to $6.7b

Business | Tereza Cai 14 Aug 2019

Shares of Galaxy Entertainment (0027) became the biggest loser among blue chips after announcing a 7 percent decline in interim net profit and other gaming shares fell after news that Macau had banned junket operators from using Macau as a base for cross-border settlement of VIP gambling services provided elsewhere.

The Macau casino owner and operator said net profit for the first half dropped by 7 percent from the year before to HK$6.7 billion, without declaring an interim dividend, but a special dividend of 46 HK cents.

Basic earnings per share fell 7.6 percent to 154.3 HK cents.

Adjusted EBITDA was down by 4 percent year-on-year to HK$8.3 billion.

Deputy chairman Francis Lui Yiu-tung said the number of Hong Kong visitors to Macau reduced recently amid the protests, but it was offset by the rising number of mainland visitors, and overall Macau has not seen visitor numbers decline.

In response to the controversial dispelling measures by the police, chairman Lui Che-woo said that it was very difficult and laborious for the police to maintain order, and he believed the police will handle the incident impartially. He also said everyone needs to forgive and assist the police' work, and he as a Hong Konger, also hopes that Hong Kong can calm down and reach mutual understanding.

He also advised parties to sit down and have a deep talk, as nobody wants to have chaos.

In terms of the VIP gambling rooms business, the deputy chairman said the Gaming Inspection and Coordination Bureau has given directions to disallow Macau casino junkets from using VIP rooms for overseas casino settlement. Galaxy Entertainment will cooperate with the regulator, he said.

When asked about the progress of obtaining casino license in Japan, Lui said there may be no further information until November. The company is talking with local government and potential partners in Japan, pending a specific timetable by the year-end.

Casino operators dropped, with Galaxy Entertainment falling 5.84 percent to HK$44.30. Sands China (1928) went down by 3.59 percent to HK$33.6.

The benchmark Hang Seng Index meanwhile slumped by 543 points to 25,281, as protesters again targeted the airport and Hong Kong's leader Carrie Lam Cheng Yuet-ngor warned the city risked sliding into an "abyss."

All blue chips saw a decline, except Sunny Optical Technology (2382), which added 0.47 percent to HK$86.40.

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