Galaxy Chairman Says Careful Cuts Required For Sake Of Recovery

Lui Che Woo, the chairman of Macau casino operator Galaxy Entertainment Group Ltd, says the company needs to balance cash conservation – during the sharp downturn in business associated with Covid-19 – with maintaining sufficient customer service capability to manage a recovery when it comes.

On the firm’s interim report, filed on Friday with the Hong Kong Stock Exchange Mr Lui noted: “It is important to not cut costs excessively and therefore adversely impact our ability to deliver upon customer service standards when business returns.”

In a webcast on August 13, following the company’s second-quarter earnings, Francis Lui Yiu Tung, vice-president of the business, said the firm had decreased its daily spending by about 26 percent quarter-on-quarter to “US$ 2.5 million” in the three months up to June 30, compared to “about US$ 3.4 million” a day in the three months up to March 31.

The Macau government has called on local employers, including the six gaming licensees, to sustain local jobs during the pandemic crisis, which in the eight months to August 31 saw the city’s gross gaming revenue (GGR) fall by 81.6 percent year-on-year.

“At Galaxy Entertainment Group, we have tried to spread the [economic] impact of Covid-19 fairly across all team members as we prefer not to engage in redundancies,” said the chairman in the interim report.

He added that the company was “proud” that “virtually all” members of staff had made “voluntary contributions” to the project. It involved the board waiving fees for their respective directors, and the management taking part in non-paid leave.

Galaxy Entertainment has one of the biggest cash piles among the six Macau operators according to market analysts.

In its interim results Galaxy Entertainment said the group’s cash and liquid assets amounted to HKD49.8 billion ( US$ 6.4 billion) as of June 30, with net cash of HKD43.6 billion. As of that date, the group’s debt stood at HKD6.2 billion, around 40 percent higher than the group debt of HKD4.4 billion listed at the end of the first quarter.