Macau casino operator Galaxy Entertainment Group Ltd reported on Thursday first-quarter adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) of HKD575 million (US$73.3 million), a decline of 33.1 percent from the prior-year period. The figure was down 44.9 percent sequentially from the final quarter of 2021.
Revenue for the first quarter was HKD4.10 billion, down 19.5 percent from a year earlier, and a decline of 13.7 percent from the fourth quarter of 2021. Net gaming revenue decreased 24.8 percent year-on-year, to HKD2.90 billion. The figure was down 10.9 percent sequentially.
The numbers were given in a summary filed with the Hong Kong Stock Exchange.
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.
Lui Che Woo, chairman and founder of Galaxy Entertainment, said in prepared remarks accompanying the summary to the Hong Kong bourse, that Galaxy Macau’s Phase 3 expansion was “effectively completed”. The company said in its announcement it would “align the opening” of the Phase 3 elements “with prevailing market conditions”.
Phase 3 includes a Raffles-branded hotel with 450 suites, the Galaxy International Convention Center, and the Andaz Macau hotel.
“The decrease in [first quarter] adjusted EBITDA is a result of recent outbreaks of Covid-19 in Greater China,” said Mr Lui.
He added: “This resulted in tightening visitation policy to preserve public health and safety which, unfortunately, adversely impacted visitation to Macau and, in turn, revenue and profitability.”
Galaxy Entertainment said in its latest filing that the group’s debt stood at HKD10.5 billion as of March 31. Cash and liquid investments amounted to HKD35.0 billion, with net cash of HKD24.5 billion.
Mr Lui confirmed that Galaxy Entertainment had applied to the Macau government for an extension until December 31 of its existing casino rights, as made feasible by the local authorities. The current licences are due to expire on June 26.
“We remain supportive of the regulatory process in Macau including a number of gaming related legislative initiatives and are also preparing for the forthcoming gaming concession tendering process,” he added.
That was a reference to two key pieces of legislation for the Macau gaming industry currently being reviewed by Macau’s Legislative Assembly. The bills, which include an amendment bill relating to the city’s existing gaming law, are due to be passed prior to a fresh public tender for Macau gaming rights.
Galaxy Entertainment said on Thursday that VIP rolling chip volume fell 67.6 percent year-on-year in the three months to March 31. Such turnover group-wide was just above HKD17.91 billion, compared to nearly HKD55.33 billion in first-quarter 2021. The figure was down 30.5 percent from the final quarter of 2021.
The casino group’s first-quarter 2022 mass table “drop” – the amount of cash wagered at mass tables and cash chips purchased at the casino cage for such games – declined by 18.3 percent year-on-year, to HKD9.46 billion. It was down 17.4 percent sequentially.
First-quarter electronic gaming volume stood at HKD4.38 billion, up 4.4 percent from a year earlier, but down 1.4 percent from the preceding quarter.
The Galaxy Macau property remained in the first quarter the primary contributor to the group’s revenue and earnings.
The Cotai venue’s first-quarter net revenue was close to HKD 3.08 billion, down 10.0 percent from a year ago, and 4.3 percent quarter-on-quarter. The property’s adjusted EBITDA was HKD724 million, down 5.2 percent year-on-year and 5.1 percent sequentially.
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