Macau Legend Development is bracing for heavy losses as its Legend Palace Casino – one of the city’s soon-to-be-shuttered satellite casinos – winds down operations, compounding the group’s ongoing financial challenges.
According to a profit warning issued by the company’s board on 26 August, Macau Legend expected to record a loss of about HK$1,421 million (US$182.2 million) for the January to June period. Its loss for the previous period was a comparatively small HK$110 million (US$14.1 million).
The bulk of the past six months’ figure stemmed from “the recognition of a significant impairment loss of approximately HK$1,288 million in the value of Macau Fisherman’s Wharf,” the regulatory filing read. The sum is equivalent to US$165.2 million.
The gaming and leisure complex is the location of Legend Palace Casino, which operates under a license from the concessionaire SJM. Legend Palace is among nine satellite casinos set to close by year-end, under Macao’s gaming laws.
[See more: Satellite casinos in Macao: what their closure means for the future]
Excluding the impairment, Macau Legend’s losses for the first half were expected to widen by about 21 percent year-on-year, with adjusted earnings before earnings before interest, taxes, depreciation, and amortisation from gaming-related operations down by nearly HK$30 million (US$3.9 million). Revenue also fell 12 percent in the period, mainly due to shrinking gaming takings.
Macau Legend has been attempting to stabilise its capital base, Asian Gaming Brief reported. In July, it announced a share consolidation, shifting from 10 billion shares amounting to HK$1 billion (US$128.2 million) into 1 billion shares each worth HK$1 (US$0.13).
The restructuring, expected to take effect on 4 September, would not alter the company’s operations or shareholder rights, according to the company.
At the end of 2024, Macau Legend carried bank borrowings of HK$2.07 billion (US$265.4 million) and shareholder loans of HK$339 million (US$43.5 million) – due within 12 months and set against cash and bank balances of HK$52.3 million (US$6.7 million).
