Macau satellite casino operator Macau legend has released a profit warning, indicating that it is expecting a HKD$640 million ($82.32 million) loss for FY24 compared to a HKD$4.9 million ($630K) loss for 2023.
Parts of the loss relates to the shuttered investment project the company was trying to formalize in Cape Verde.
In November of last year, the Cape Verde government announced it had terminated its contracts with Macau legend development claiming repeated violations of obligations related to a €250 million ($264.7 million) tourism and gaming investment in the capital city of Praia.
The project was first announced in 2015 but has not progressed since construction began in 2016 causing the government to claim that MLD violated the legal frameworks surrounding its obligations.
The group notes that it is expecting the recognition of a significant impairment loss in relation to the deposits paid property and equipment and right of use assets held by the group’s investment projects in Macau and Cape Verde.
It also highlights that it recognized a provision from Macau complimentary tax of HK415 million in the prior years due to a disposal of a subsidiary of the group.
The group in 2023 agreed to sell its entire investment in MLD resorts Lao limited for $39 million. This relates to the former Savan Vegas hotel and casino project in Laos.
The group had also sold off its interests in the Macau Landmark satellite casino operation.
While the group notes that the ‘impairment and the write back of provision are non-cash items and do not have an impact on the group’s cash flow and operations’, it does note they will ‘significantly impact reported performance for the reporting period’, resulting in the loss.
Macao Legend’s satellite casino operations in the gaming hub – it’s only income stream – also face uncertainty due to the termination of the extension agreement for satellite casinos at the end of 2025.
