Macau Legend Development Ltd has announced that it expects to record a significant loss of approximately HK$1.42 billion (US$182 million) for the first half of 2025, a sharp increase from the HK$110 million (US$14.1 million) loss during the same period last year. The company disclosed in a filing to the Hong Kong Stock Exchange that the setback stems largely from an impairment loss of about HK$1.29 billion (US$165 million) linked to the impending closure of its Legend Palace Casino at Macau Fisherman’s Wharf.

Declining Revenue and Adjusted EBITDA

The loss follows SJM Resorts S.A.’s decision not to renew its service agreement with Macau Legend when it expires on December 31, 2025. As a result, Legend Palace — one of nine satellite casinos currently operating under SJM’s brand — is set to cease operations by the end of the year. SJM has indicated it plans to retain only Ponte 16 and L’Arc, transitioning them into wholly owned casinos.

“The significant increase in loss was mainly attributable to the recognition of a significant impairment loss of approximately HK$1.29 billion in the value of Macau Fisherman’s Wharf, operated by Macau Fisherman’s Wharf International Investment Limited and Hong Hock Development Company Limited, subsidiaries of the Company, as a result of the non-renewal of service agreement with SJM Resorts S.A. upon expiry on 31 December 2025,” the company stated.

Excluding the impact of the impairment and its deferred tax effects, Macau Legend’s first-half loss would still have risen by around HK$23 million (US$2.95 million), a year-over-year increase of approximately 21%. This was primarily driven by a HK$30 million (US$3.85 million) decline in adjusted EBITDA from gaming operations, reflecting the continued downturn in gaming revenue.

Total group revenue for the first six months of 2025 is projected to be about 12% lower than the previous year, underscoring the financial pressures facing the operator as its gaming-related income weakens ahead of the satellite casino closures mandated by regulatory changes effective January 1, 2026.

The three-year grace period granted by Macau authorities to allow satellite operators and license holders to transition to a management fee model is now coming to an end, leaving properties like Legend Palace without operational continuity under their current setup.

Share Consolidation and Liquidity Measures

In addition to its operational challenges, Macau Legend is pressing ahead with a share consolidation plan to support trading activity and improve its stock performance. As stated in the company’s press release (pdf), effective August 1, every 10 existing shares were consolidated into one share, with the company confirming that the consolidation “will not alter the underlying assets, business operations, management or financial position of the company or the proportionate interests or rights of the shareholders.” The change is expected to be fully effective by early September.

Despite these efforts, the company remains under significant financial strain. As of the end of 2024, Macau Legend reported approximately HK$2.07 billion (US$265 million) in bank borrowings and HK$339.4 million (US$43.6 million) in shareholder loans due within 12 months or payable on demand, while holding only HK$52.3 million (US$6.7 million) in cash and bank balances.

In early July, the group reached an agreement with lenders to defer payments on nearly HK$2.1 billion (US$268 million) in loans until late 2026 and arranged a “loan variation agreement” to restructure payments on another facility, providing temporary relief to its strained cash flow.