Macau casino operator Galaxy Entertainment Group Ltd on Tuesday reported annual profit up 51 percent for 2016, thanks in part to what the chairman said was tighter cost controls.
Such profit was HKD6.28 billion (US$809.1 million) compared to HKD4.16 billion in the prior year. Group revenue for the period was up 4 percent, to HKD52.8 billion.
The company declared a special dividend of HKD0.26 per share for the year, to be paid on or about April 28. It is in addition to the two special dividends of HKD0.15 and HKD0.18 per share already paid during the 12 months.
Full-year group adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) increased by 18 percent year-on-year to HKD10.3 billion.
“We have worked hard during the period to carefully control costs without adversely impacting customer service standards and to substantially grow our mass market business,” said the company’s chairman Lui Che Woo, in a company press release outlining the results.
The group’s total gaming revenue in 2016 reached approximately HKD49.5 billion, up by 2 percent from the previous year, said the company. Revenue from mass table games stood at HKD21 billion, an increase of 19 percent year-on-year, while VIP revenue declined by 8 percent to HKD26.5 billion.
In the 12 months, mass gaming table drop at its flagship Galaxy Macau property rose 19 percent, to HKD32.05 billion, but VIP table games turnover fell 12 percent year-on-year, to HKD490.69 billion, according to its results filed to the Hong Kong Stock Exchange on Tuesday.
Electronic gaming revenue at Galaxy Macau was up 8 percent year-on-year, to HKD1.73 billion.
Non-gaming revenue for 2016 at Galaxy Macau – a property with five branded hotels – was up 21 percent from the prior year, at HKD2.80 billion.
Group wide in the fourth quarter, revenue increased 8.3 percent year-on-year to HKD14.4 billion and adjusted EBITDA increased 20 percent from the prior-year period to HKD3.0 billion.
Galaxy Macau’s quarterly adjusted EBITDA increased 16 percent year-on-year to HKD2.4 billion. StarWorld Macau’s adjusted EBITDA increased 14 percent year-on-year to HKD637 million in the fourth quarter.
In commentary on the long-expected Phase 3 and Phase 4 of Galaxy Macau, the firm said: “We continue to move forward with our planning, with the potential to commence construction in late first quarter or early second quarter of 2017.”
It added such development would have “a significant focus” on non-gaming, primarily targeting meetings incentives, conferences and exhibitions, entertainment and family facilities.
The group added that a “concept plan” for a project on Hengqin Island, a piece of mainland Chinese territory next door to Macau, was still in progress, and the company anticipated being able to provide more details “later in the year”.
“Galaxy Entertainment Group is continuously exploring opportunities in overseas markets, including Japan,” it added in its results filing, referring to the opportunities for casino resorts in that country since an enabling bill to legalise such business was passed by lawmakers in December.
The group said it had cash and liquid investments amounting to HKD22.6 billion and net cash of HKD16.7 billion; with group debt of HKD5.9 billion as at December 31.
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”Assuming that our [Tigre de Cristal] phase two project and the other future operators’ development plans remain on track, we may see the benefits of a ‘cluster’ effect [in the Primorye Integrated Entertainment Zone] as early as 2021”
Summit Ascent, lead developer of Tigre de Cristal