Macau Legend Development Ltd, the operator behind Macau’s Legend Palace and the Macau Fisherman’s Wharf precinct, has issued a profit warning, projecting a loss of up to HK$640 million (US$80 million) for the fiscal year ending 31 December 2024. This marks a stark increase from the HK$4.9 million (US$612,500) loss reported in the previous year. ​

In a recent filing (pdf) with the Hong Kong Stock Exchange, Macau Legend attributed the expected loss primarily to the recognition of significant impairment losses related to deposits, property and equipment, and right-of-use assets associated with the group’s investment projects in Macau and Cape Verde. Additionally, the company acknowledged a provision for Macau complementary tax amounting to HK$415 million (US$51.9 million) from prior years, linked to the disposal of a subsidiary. This provision had been written back to profit or loss in the preceding period, as detailed in the 2023 Annual Report. ​

Despite these financial challenges, Macau Legend reported a 4.3% increase in total revenue for FY24. The company emphasized that the impairment and tax provisions are non-cash items, indicating they do not affect the group’s cash flows or daily operations but will significantly impact the reported financial performance for the period. The final results are scheduled for release by the end of this month. ​

Cape Verde Casino Project Termination

Compounding Macau Legend’s financial difficulties, the government of Cape Verde recently terminated the company’s concession to develop and operate a casino resort in Praia, the nation’s capital. Authorities accused Macau Legend of “flagrantly and repeatedly” violating its obligations by failing to resume construction work. The Cape Verde government stated, “The State of Cape Verde has no choice but to proceed with the termination of the contracts.” ​

The government further alleged that Macau Legend’s subsidiaries breached contractual obligations on multiple fronts, including transferring more than 20% of their share capital without authorization—a reference to the 2020 sale of a 20.65% stake to Levo Chan, former CEO of Macau’s Tak Chun Group. Chan was later convicted and sentenced for illegal gambling, fraud, and money laundering. ​

Macau Legend has announced its intention to seek legal counsel and vigorously contest the Cape Verde government’s decision to safeguard the interests of the company and its shareholders. ​

The termination of the Cape Verde project and the anticipated financial losses add to Macau Legend’s ongoing financial woes. In late August 2024, the company highlighted material uncertainties regarding its ability to continue as a going concern. For the six months ending 30 June 2024, Macau Legend reported a net loss of HK$109.9 million (US$14.1 million).