Studio City International Holdings Announces 137.2 Mln. Euro Loss In FSM 2020

Article by : Helen Sep 2, 2020

Studio City, one of Macau’s most visible and popular resorts, reported a record loss of €137.2 million. The main reason for this anti-record was the coronavirus’s detrimental impact, which affected the vast majority of gaming operators in the region.

As a result of the Chinese authorities’ restrictions, the tourist flow to Macau was minimal. The gaming operator immediately felt a decrease in the number of customers, which led to a sharp deterioration in financial performance. The cessation of passenger traffic for several months came as a real shock to the gambling and travel industry. The hotels also ended up in the wrong place at the wrong time. Revenues from the hotel rooms’ rent slipped 76.7% up to 8.3 million euros. Food revenues also fell by 68.4% up to € 9.3 million. The total loss of the casino in the first half of 2020 reached about 19 million euros. Meanwhile, last year’s period showed an excellent profit of 162 million euros.

The shutdown of casinos and the temporary closure of hotels resulted in a 22.4% decrease in Studio City’s total operating expenses. The same was true for almost all of the operational costs that Studio City faced regularly. Service revenue fell 22% to € 12.8 million. At the same time, revenue from shopping centers increased by 392.8% to 8.05 million euros. Retail and other revenues fell 34.1% to € 642,645.3. The lack of a constant tourist flow somehow played into the hands of the game operator. As a result, the company was able to reduce operating expenses in the vast majority of segments. Food and beverages declined from 24.8 million euros to 13.6 million euros, while spending on entertainment fell by 84.9% to 1.6 million euros.

According to official information, the general situation with the restart of gaming establishments in Macau may be postponed until September.

Public issuance of tourist visas may resume after 23 September. This means that the company will still witness the harsh impact of Covid-19 for a month, which will smoothly move into the third quarter and is unlikely to recover by the end of the year. Company executives have already said they continue to provide all necessary safety precautions at all of their facilities. Security measures are designed to protect the staff and future customers who may eventually return to gambling establishments. The company also noted that it would continue the second phase of the casino facility’s construction during the Covid-19 pandemic. Previously, Studio City estimated that the construction period could last around 32 months. However, given that the situation is not improving, plans for the facility’s construction will likely go beyond 32 months.

A possible improvement in the epidemiological situation is still in the distant future. The constant increase in new Covid-19 cases postpone the potential recovery of the gaming operator’s financial performance for future periods. Until the visa restrictions are lifted, and Macau opens to mainland Chinese residents, Studio City will experience further financial difficulties. It is also worth considering customers’ moods, who are unlikely to begin to resume trips to the region for entertainment and recreation immediately. Anyway, operators hold their breasts waiting for Chinese guests to come back.

In general, Macau is experiencing incredible difficulties due to the closure of gambling establishments and hotel complexes. The high population density and the potentially rising unemployment rate suggest that 2020 will be one of the most challenging times for casino operators and the local economy.

Helen

Chief Editor

SlotsUp - Free Slots Universe at FacebookSlotsUp slot games at PinterestSlotsUp at TwitterSlotsUp's Slot Games video reviews at Youtube