Grand Lisboa on pace to open on time
In a September 29 filing to the Hong Kong Stock Exchange, MGM Resorts International said it would postpone the opening of its new casino resort on Macau’s Cotai Strip to January 29, 2018. The company stated that the construction site, which sustained damage from Typhoon Hato, must be repaired before the property can be completed. Government authorities will then inspect the property prior to licensure.
Despite the latest setback, MGM Cotai will be open in time for the Chinese Lunar New Year holiday, which begins February 16.
Typhoon Hato hit the region on August 23, packing winds in excess of 120 miles per hour. According to the Macau Daily News, island-based casinos including the incomplete MGM Cotai site were hit harder by the storm than those on the Macau peninsula. That contradicts previous reports that resorts in the newer Cotai district were not as strongly affected as those downtown, where the streets are narrower and the infrastructure older.
Originally set to open in 2016, the new MGM development has been beset by delays. As a result, the U.S. company’s investment is likely to increase about 4 percent, from HKD26 billion (US$3.3 billion) to HKD27 billion (US$3.45 billion) due to the delays and repairs, reported Macau Business.
“We do not rule out the possibility of near-term share price weakness for MGM China as a result of the delay,” Daiwa Capital Markets told the Nikkei Asian Review. “Indeed, there are risks of marginal earnings cuts by the street in the foreseeable future.”
MGM’s neighbor in the district, SJM Holdings’ Grand Lisboa Palace, also was damaged by Hato as well as a September 23 fire at the construction site. But SJM CEO Ambrose So said the resort is still on track to opening in the second half of 2018. The budget for the property will not increase, So said, though the firm may make “an adjustment on the labor force” and also make “technical adjustments.”
“We are currently evaluating the impact of the fire and will try to expedite the construction through adjusting the procedures,” So said.
