Macau-based casino operator Galaxy Entertainment Group Ltd plans to open “progressively” Phase 3 of its Galaxy Macau resort (pictured) in the second quarter of this year. The announcement was made on Thursday by company chairman Lui Che Woo in remarks included in the firm’s fourth-quarter results report.
“We are scheduled to progressively open Phase 3 Galaxy International Convention Center, Galaxy Arena and Raffles [hotel] at Galaxy Macau in the second quarter of 2023, with our first MICE [meetings, incentives, conferences, and exhibitions] event being held in April 2023”, said Mr Lui.
He added: “We will continue to monitor market conditions and when appropriate we will open Andaz Macau.” That was a reference to a new hotel, also part of Phase 3 of Galaxy Macau. Andaz Macau will have 700 rooms and suites.
The Galaxy International Convention Center includes the 16,000-seat, multipurpose Galaxy Arena, and 40,000 square metres (430,556 sq feet) of space for MICE events.
The Galaxy Arena is set to host its first show in late April, followed by two concerts in May by South Korean girl group Blackpink.
Fourth-quarter net revenue at Galaxy Entertainment was up 43.4 percent sequentially at HKD2.92 billion (US$371.7 million), the firm announced. Such revenue was down 38.6 percent from the prior-year period.
The group’s fourth-quarter adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) were a negative HKD163 million, still an improvement over the negative EBITDA of HKD581 million recorded in the previous quarter. The result compared with positive EBITDA of HKD1.04 billion a year earlier.
Galaxy Entertainment reported net revenue of HKD11.47 billion for full-year 2022, down 41.7 percent year-on-year. The casino operator had a net loss of HKD3.43 billion (circa US$437.5 million) for the period, versus profit of HKD1.33 billion in 2021.
Galaxy Entertainment runs its flagship casino resort Galaxy Macau (pictured) on Cotai; the StarWorld Hotel, the group’s main venue on Macau peninsula; and Broadway Macau, the mass-market focused property next door to Galaxy Macau.
Casinos in Macau continued to operate in the fourth quarter in a low-revenue environment amid Covid-19 alerts and outbreaks of the disease either in Macau or mainland China. Since the onset of the pandemic, mainland China had been the only place to have a largely-quarantine free travel arrangement with Macau.
Macau and mainland China eventually lifted their respective ‘zero-Covid’ policies from early January this year, scrapping also existing travel restrictions.
Galaxy Entertainment’s chairman Mr Lui noted in his remarks included in Thursday’s results announcement, that the firm was “pleased with the reopening of borders in early 2023”.
He added: “Macau has experienced solid demand and associated revenue and we were particularly encouraged by the performance over the Chinese New Year Golden Week. We are hopeful for a sustainable recovery and remain cautiously optimistic.”
Gaming revenue up sequentially
The group’s net gaming revenues in the fourth quarter of 2022 jumped by 93.7 percent sequentially, to HKD1.59 billion. But that was still a decline of 51.2 percent in year-on-year terms.
A community outbreak of Covid-19 in Macau, which started on June 18 and took more than a month for the authorities to bring under control, saw a 12-day shutdown in July of the city’s casinos as a precaution. That negatively impacted the industry’s results for the third quarter of 2022.
At Galaxy Macau, total fourth-quarter net revenue was HKD1.83 billion, down 42.9 percent in year-on-year terms, but a significant increase from the HKD1.07 billion in the three months to September 30.
Adjusted EBITDA at Galaxy Macau was positive in the fourth quarter, to the tune of HKD58 million. That compared to positive EBITDA of HKD763 million a year earlier, and negative EBITDA of HKD299 million in the third quarter of 2022.
The property recorded net gaming revenue of just under HKD1.38 billion in the three months ended December 31, down 47.0 percent in year-on-year terms, but a sequential increase of 107.8 percent.
The firm said the group’s balance sheet remained “healthy and liquid”. As of December 31, 2022, cash and liquid investments amounted to HKD26.4 billion and the group’s net cash was HKD18.9 billion.
Total debt was HKD7.5 billion, which the firm said primarily reflected its “ongoing treasury yield management initiatives”. It added that “core debt remained minimal” at HKD0.4 billion.
In the latest filing, the company said it was “now firmly focused on the development of Phase 4, which is already well under way.” It did not provide any further news on its progress, though mentioned in a presentation, that it “includes gaming”.
