Galaxy sinks $2.8b in the red

Business | Winnie Lee 14 Aug 2020

Galaxy Entertainment (0027) recorded negative adjusted earnings before interest, taxes, depreciation and amortization of HK$1.08 billion in the first half, compared to HK$8.31 billion in the same period last year.

The group declared no interim dividend given the ongoing pandemic.

First half net losses were HK$2.85 billion, compared to a net profit of HK$6.68 billion a year before.

Net revenue in the first six months fell 76 percent year-on-year to HK$6.22 billion.

The adjusted EBITDA in the second quarter showed a HK$1.37 billion loss, compared to a gain of HK$4.33 billion in the same period last year. It was also worse than the first quarter positive adjusted EBITDA of HK$283 million.

Its three biggest projects all recorded losses in the second quarter. Galaxy Macau recorded a negative adjusted EBITDA of HK$1.17 billion, while StarWorld Macau and Broadway Macau posted adjusted EBITDA losses of HK$306 million and HK$52 million, respectively.

"Going forward, we expect to experience further headwinds from the pandemic, which will have an adverse impact on our financial performance," the company said.

Galaxy Entertainment chairman Lui Che-woo said he was glad the Individual Visit Scheme has been relaxed, and added that he believed it will encourage the reopening of travel to Macau. He said construction of Cotai Phases 3 and 4 will go on as originally planned, but the pace of construction could not be increased in a short period of time. He added that Galazy will keep an eye on development opportunities in Japan.

Also, vice chairman Francis Lui Yiu-tung pointed out that daily expenses in the first quarter were US$3.4 million (HK$26.52 million) and only US$2.5 million in the second quarter, and as such, it is too early to say it has broken even.

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