Galaxy Entertainment Group has credited the company’s strong balance sheet for allowing it to progress with expansion plans in both Macau and Japan, despite the severe impact of the COVID-19 pandemic.
Providing a development update as part of its 3Q20 results announcement on Tuesday – which included a narrowed Adjusted EBITDA loss of HK$943 million (US$121.6 million) – GEG made note that its “prudent business management” had ensured a “strong and virtually unlevered balance sheet” with HK$43.2 billion in cash (US$5.57 billion) at the end of September.
“This provides us with valuable flexibility in managing operations and supporting our development initiatives,” the company said. It also, “allows us to continue to invest into and upgrade our existing resorts and proceed with the planned opening of [Galaxy Macau] Phases 3 and 4.”
However, Galaxy added that while it is striving to maintain its development targets for its latest Galaxy Macau expansion, timelines may be impacted due to COVID-19 with the company continuing to review and refine its plans.
At this stage, it said, Galaxy Phases 3 and 4 – currently scheduled to open in mid-2021 after the original target of late 2020 was pushed back earlier this year – will feature 3,500 high-end hotel rooms and villas, 400,000 square feet of MICE space, a 500,000 square feet 16,000-seat multi-purpose arena, F&B, retail and more gaming space.
Also delayed due to COVID are Japan’s plans to develop the nation’s first integrated resorts. In October, the central government published a revised Basic Policy draft on IRs while postponing the start of the national IR application period by nine months from January 2021 until October 2021.
In response, GEG said on Tuesday that it will continue to pursue its Japan IR bid and “understands that [Japan’s] schedule for accepting applications from local government and consortium parties has been extended to April 2022.
“Our Japan based team continues with our Japan development efforts even as they deal with the COVID-19 crisis. We view Japan as a great long term growth opportunity that will complement our Macau operations and our other international expansion ambitions.
“GEG, together with Monte-Carlo SBM from the Principality of Monaco and our Japanese partners, look forward to bringing our brand of World Class IRs to Japan.”
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