Macau casino operator Galaxy Entertainment Group Ltd reported third-quarter adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) of HKD4.1 billion (US$524.0 million), up 6 percent year-on-year but down 5 percent sequentially.
Galaxy Entertainment said its third-quarter net revenue was down 2 percent year-on-year and 4 percent sequentially, to HKD12.7 billion. The numbers were in the group’s selected and unaudited operating highlights for the three months to September 30, filed with the Hong Kong Stock Exchange on Thursday.
Lui Che Woo, the firm’s chairman, said in a press release issued shortly after the results were posted to the bourse: “Given the overall market conditions and weaker global consumer sentiment we believe the group has delivered solid financial results.”
“Macau has faced numerous headwinds in 2019, these include ongoing trade tensions, a slowing global economy, regional competition, currency fluctuation, [and] disruptions in Hong Kong, among others. These events have been impacting consumer sentiment and subsequent spending habits,” Mr Lui added.
Galaxy Entertainment said in Thursday’s filing that it “played lucky” in the three months to September 30, which increased adjusted EBITDA by approximately HKD184 million. Normalised third-quarter adjusted EBITDA would have been about HKD3.9 billion, down 7 percent year-on-year, it added.
The group’s total gross gaming revenue (GGR) in the three months to September 30 fell by 10 percent year-on-year, to HKD14.3 billion. The GGR figure is reported on a management basis – i.e., excluding GGR generated by the City Clubs, several Macau venues that use Galaxy Entertainment’s gaming licence but are managed by third-party investors.
Total mass table GGR for the period rose by 11 percent year-on-year to HKD7.3 billion, while aggregate VIP GGR stood at HKD6.4 billion, down 26 percent from a year earlier, said the company. Group-wide rolling chip volume for the third quarter stood at nearly HKD163.8 billion, down 38.1 percent from the prior-year period.
Official data from Macau’s gaming regulator showed that market-wide VIP GGR fell 22.5 percent year-on-year in the third quarter, while the mass-market segment reported a 17.7 percent growth for the period.
Galaxy Entertainment said that during the third quarter, Galaxy Macau casino resort generated net revenue of HKD9.3 billion, flat from a year earlier. The property’s adjusted EBITDA was HKD3.2 billion, up 7 percent from the prior-year period.
The firm said VIP rolling chip volume at the property for the third quarter was HKD110.3 billion, down 71.9 percent year-on-year. That translated into revenue of HKD4.8 billion, compared to nearly HKD6.4 billion in the prior-year period.
Mass gaming revenue for the venue was HKD5.1 billion, compared with HKD4.4 billion in the third quarter 2018.
At the group’s StarWorld Hotel (pictured) property on Macau peninsula, net revenue was HKD2.5 billion, down 14 percent year-on-year. Adjusted EBITDA was HKD828 million, a decline of 11 percent year-on-year despite the property “playing lucky” in its gaming operations, said the firm.
StarWorld’s VIP rolling chip volume for the third quarter was approximately HKD50.0 billion, down 32.2 percent year-on-year. This translated into revenue of HKD1.4 billion, down 36.4 percent from a year earlier.
Mass gaming revenue at StarWorld was nearly HKD1.7 billion, flat compared with the third quarter 2018.
At the group’s Broadway Macau property on Cotai – which operates without VIP play – net revenue for the third quarter 2019 stood at HKD141 million, versus HKD145 million a year earlier. Adjusted EBITDA was HKD2 million in the reporting period, versus HKD9 million a year earlier.
The company paid a previously announced special dividend of HKD0.46 per share on October 25.
Galaxy Entertainment said in Thursday’s filing that the company continued to progress with the previously-announced HKD1.5-billion revamp of Galaxy Macau and the StarWorld Hotel.
“We are pleased to have recently completed the renovation of two VIP rooms which have been well received by our customers,” stated the company.
“The programme continues on schedule and on budget, said the firm, confirming that it expected the revamp to “be completed by mid-2020”.
Galaxy Entertainment announced on Tuesday that it plans to open in Macau in the first half of 2021 an Andaz hotel, a brand of Hyatt Hotels Corp. The new hotel – with about 700 rooms and suites – will be part of Phases 3 and 4 of Galaxy Macau casino resort in the city’s Cotai district.
In August the casino firm’s management said the first portion of Galaxy Macau Phase 3 would probably open in late-2020, rather than mid-2020 as had been mentioned previously.
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Proportion of mass-market GGR in the aggregate casino revenue for 2019 in the Macau market