Macau casino operator Galaxy Entertainment Group Ltd on Thursday reported revenue of HKD14.1 billion (US$1.81 billion) for the first quarter of 2017, up 5.2 percent from the prior-year period. Judged quarter-on-quarter, revenue declined 2 percent, the firm said in a filing.
The company reported adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) of HKD3.2 billion for the three months to March 31, up 31 percent year-on-year. The company said it “played lucky” during the first quarter, which contributed to its adjusted EBITDA increasing by approximately HKD50 million.
“Our financial results continued to show positive momentum over the fourth quarter 2016,” Lui Che Woo, chairman and founder of Galaxy Entertainment, said in a statement accompanying the selected first-quarter numbers.
He added: “We continue to drive each and every segment of our business with a particular focus on yielding our resorts and delivering profitable volumes.”
Galaxy Entertainment’s total gaming revenue reached approximately HKD13.1 billion in the first quarter of 2017, up 4 percent from the prior-year period but down 2 percent quarter-on-quarter, the firm said.
The casino operator saw its revenue from mass table games increase 15 percent year-on-year to HKD5.8 billion, while VIP revenue fell 5 percent from a year earlier to HKD6.8 billion. The firm said that a modest volume increase in VIP turnover “was more than offset by not playing as lucky”.
Galaxy Entertainment said its flagship Galaxy Macau (pictured) generated HKD10.2 billion in revenue in the three months to March 31, up 5 percent year-on-year. The property’s adjusted EBITDA rose 27 percent year-on-year to HKD2.6 billion.
Broadway Macau, which does not offer a VIP rolling chip programme, recorded revenue of HKD135 million in the first quarter of 2017, including down 25.4 percent from the prior-year period.
StarWorld Macau, on the Macau peninsula, reported first quarter revenue of HKD3.1 billion, up 6 percent year-on-year. Adjusted EBITDA for the property rose by 27 percent year-on-year to HKD649 million.
The casino operator said it had cash and liquid investments of HKD25.0 billion and net cash of HKD19.8 billion as of March 31, 2017. The company had debt of HKD5.2 billion at the end of the first quarter, which it said was primarily related to an “ongoing treasury yield management initiative”.
“We continue to carefully manage our capital allocation with a view to the development of Cotai, Hengqin and international opportunities,” said Mr Lui.
The executive said the company “is embarking on its next growth programme and will soon commence construction” of the long-expected Phase 3 and Phase 4 of Galaxy Macau. The new phases will include hotel rooms, convention and exhibition space, entertainment and gaming, according to the company.
Galaxy Entertainment said it continues to explore opportunities in overseas markets, including Japan, where an enabling bill to legalise casino business was passed by lawmakers in December.
In late March, Galaxy Entertainment and Monaco casino firm Société des Bains de Mer et du Cercle des Étrangers à Monaco, also known as SBM, announced the formal establishment of a strategic partnership. The two companies said they would be working together on the development and operation of entertainment businesses including integrated resort projects in the Asia-Pacific region, namely in Japan.
For 2016, Galaxy Entertainment had reported a 51-percent increase in net income, to HKD6.28 billion. The company paid a special dividend of HKD0.26 per share on April 28 this year.
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"The stronger mass growth [in Macau in the second quarter] should be viewed positively vis- à-vis [the] government’s stated priority”
Japanese brokerage Nomura