Macau casino firm posts HK$734m loss after interest payments and amortisation but turnover up 142pc Macau casino operator Galaxy Entertainment Group swung to a first-half loss after hefty interest payments and amortisation arising from acquiring a gaming licence last year. Despite a 142 per cent rise in turnover to HK$1.31 billion, the former Hong Kong construction company had a net loss of HK$734.45 million for the first six months, compared with a gain of HK$14.3 million a year ago, it said yesterday. Previously known as K Wah Construction Materials, it completed the HK$18.4 billion acquisition of an effective 97.9 per cent interest in the gaming business from the family of chairman Lui Che-woo in July last year. Galaxy booked gaming turnover of HK$741 million and segment earnings before interest, tax, depreciation and amortisation of HK$46 million. The company paid HK$289 million in finance costs to service bank loans and a US$600 million high-yield bond issued last year. Recurring amortisation of its casino licence, which expires in 2022, amounted to a booked expense of HK$495 million for the period. 'We wish the results from the first half had been better but on the other hand, we are still very much in the building mode of the operation,' said chief executive Anthony Carter. Galaxy said its share of total Macau gaming revenues increased to an average 19.4 per cent from June to August compared with 7 per cent during the first three months of the year. Expansion drove the increase, as the company opened three new 'city club' or franchised casinos between February and May, bringing its total number of gaming outlets in the territory to four. 'We expect tourist arrivals will pick up in the second half because of new [casino] openings,' said Mr Lui. Galaxy yesterday said the hotel and 250-table mass-market gaming floors at its HK$2.5 billion flagship StarWorld casino resort will open on October 19, three months later than originally planned. A two-floor VIP gaming section featuring eight rooms and 36 tables for high-stakes play will follow in November. The 500-room hotel features eight Asian restaurants and expects to price rooms at less than HK$1,000 per night, Mr Carter said. As a self-owned venue, the hotel should offer a significant boost to turnover since the company will not have to share any of the income with hotel operators. Total net gaming win at Galaxy's four existing 'city club' casinos was HK$2.2 billion during the half but the company's share of that was only approximately 4.2 per cent. 'I am confident that once we bring all these operations online and the second half develops the way we think it will with this increased interest in Macau we will have a very different picture for the full-year results,' said Mr Carter. The company also announced yesterday it will pay a HK$2.5 billion land premium after finalising terms with the Macau government this week for rights to develop the whole of its 4.7 million square foot plot on reclaimed land at the Cotai Strip. Galaxy previously said it would pay an HK$800 million premium to develop only about 35 per cent of the site for the first phase of its 1,500-room Mega Resort, scheduled to open in 2008.