Continuing to build

Gaming and hospitality operator Macau Legend Development Limited saw a slight year-on-year increase in its revenue for 2016, but drops in its gaming business’ profit and increases in losses for the non-gaming sector contributed to a HK$277.49 million (US$34.6 million) loss for the group last year, according to the group’s filing with the Hong Kong Stock Exchange. The loss amounted to a 3.35 per cent year-on-year increase for 2016.
Overall the group pulled in revenue amounting to HK$1.47 billion during the year, a 2.5 per cent year-on-year increase aided by the first contributions from the operations of Savan Vegas Casino in Laos, which contributed HK$90.98 million in revenue since its acquisition by Macau Legend.
The new property contributes the largest number of gaming tables and slot machines of the group – with 466 slot machines and 84 gaming tables, of which 45 are mass market and 39 are VIP.
For the year, the group’s gaming revenue increased approximately 6.1 per cent year-on-year, according to the filing, reaching HK$952.4 million, while the group’s non-gaming revenue decreased by approximately 3.7 per cent year-on-year to HK$519 million.
However, a large increase was seen in the group’s non-gaming loss, which increased 129.7 per cent year-on-year, hitting HK$171.45 million for the year, as compared to a HK$74.64 million loss registered in 2015.
Gaming profit for the year increased 25.8 per cent year-on-year, reaching HK$152.06 million, as compared to HK$205.13 million registered in the previous year.

Results
The group notes that its non-gaming loss was ‘offset by contribution of revenue from Savan Legend of approximately HK$7.2 million’, whereas aside from the Savan Vegas Casino contribution, a total of HK$33.3 million was contributed by the group’s self-run VIP operation, New Legend.
A decrease in revenue from the group’s Pharaoh’s Palace Casino and Babylon Casino amounting to HK$59.4 million as well as a HK$10.4 million decrease in revenue from outsourced VIP tables weighed on the group’s yearly results.
Non-gaming revenue decrease was mainly attributed to a HK$15 million drop in revenue from The Landmark, Macau and a HK$11.9 million fall in revenue from its Macau Fisherman’s Wharf property – ‘which in turn was mainly due to decreases in income from hotel rooms and building management services of the hotel,’ notes the filing.
Overall VIP table revenue amounted to approximately HK$217.1 million, a 22.4 per cent increase year-on-year, according to the filing, while HK$177.3 million was derived from the group’s New Legend operations.
The group’s highest earners in terms of revenue was the Pharaoh’s Palace Casino mass market, which reached HK$539.95 million during 2016, a 9.1 per cent decrease year-on-year.
The group’s Babylon casino contributed HK$112.14 million in mass market revenue and HK$40.87 million in self-run VIP, while the group’s Savan Vegas property made nearly as much from slots, at HK$35.55 million, as it did from mass market, at HK$38.59 million, whereas its self-run VIP tables pulled in HK16.83 million since Macau Legend acquired the property. Slot machines at Babylon Casino underwent a 475.4 per cent increase year-on-year for 2016, with revenue hitting HK$700,000, according to the filing.
The group’s Landmark Macau operations contributed approximately 40.3 per cent of the group’s overall non-gaming revenue, at HK$208.9 million, while its Macau Fisherman’s Wharf contributed 58.3 per cent, and Savan Vegas approximately 1.4 per cent. The Laos property only registered a 52.2 per cent occupancy rate, as compared to a 78.1 per cent occupancy rate at The Landmark Macau, 78.4 per cent at the Rocks Hotel, and 77.9 per cent at the Harbourview Hotel.

What’s next?
Upcoming projects for the group include a dinosaur park and a new ‘multi-purpose entertainment and performance theatre’ with over 1,000 seats, slated for completion in the fourth quarter of this year. In addition, the yacht club and public pier is scheduled to be completed in the second quarter of next year. ‘Construction for the integrated resort has commenced’ for the group’s Cape Verde project, for which the group invested approximately 250 million euros, whereas the group doesn’t provide updates on its Setubal riverfront area interest.
The filing notes that the group plans to construct an ‘opera house’ and ‘intelligent exhibition centre’ in Macau, while working on its Laos property to ‘build it into a regional entertainment hub in Southeast Asia’, noting that it has ‘already begun to create an operation and marketing hub’ in the country.
‘The Group will continue to focus on Southeast Asian destinations where the ‘‘One Road, One Belt’’ policy from China is supporting new investment in tourism and tourism related infrastructure and will also focus on Portuguese-speaking countries, like Cape Verde, to make good use of the Sino- Portuguese platform for the Group’s business diversification overseas,’ notes the filing.