Jun 27, 2014 Newsdesk Latest News, Macau, Top of the deck
Lui Che Woo (pictured), founder and chairman of Macau casino operator Galaxy Entertainment Group Ltd, said he expects company net profits to grow in 2015 by as much as 50 percent year-on-year thanks to the opening of Phase 2 of its flagship Galaxy Macau resort on Cotai.
Last year the firm posted net profits of HK$10.1 billion (US$1.3 billion), up 36 percent year-on-year.
It is spending HK$19.6 billion on Galaxy Macau Phase 2. Analysts say the facility could open as early as the Lunar New Year holiday in February, although the company has declined to comment on a precise launch date.
It’s also not clear at this stage precisely how many gaming tables Phase 2 will have, given the government’s cap on table numbers and Macau’s labour shortages. The unemployment rate was again only 1.7 percent in May according to government data published on Thursday.
Referring to the recent fortunes of Galaxy, which is nowadays challenging the traditional market share dominance of SJM Holdings Ltd when it comes to gambling revenue, Mr Lui stated to business television channel CNBC: “We’ve been seeing [profit] increases over the years. Next year with the opening of Phase 2, I think we may see the number grow even more. Not only 36 percent, perhaps over 40 percent,” said the Galaxy chairman.
“Compared to this year, 40 or even 50 percent [up], because Phase 2 will make everything bigger,” Mr Lui added.
Asked if he was concerned that a slowdown in China’s economy might hit his company’s business, Mr Lui stated: “I think there’s no need to worry because we are fulfilling the policy requirements of mainland China.”
That included diversifying Galaxy’s offer into more non-gaming options, he suggested.
“We will go in all directions, so that we are more of a hub for relaxation and tourism and not so much gaming,” the Galaxy chairman said.
In March, the Hong Kong-listed company announced in a filing that it had signed a framework agreement with the authorities on the mainland’s Hengqin Island, next door to Macau, to “move forward” with a RMB10 billion (US$1.6 billion) non-gaming resort on a 2.7 square kilometres (1.0 sq. miles) parcel of land.
“Apart from relaxation, we’ve added trade and tourism to the mix. We hope to dilute our gambling component…95 percent of our facilities will be for non-gaming,” Mr Lui told CNBC, referring to the firm’s Macau offer.
Though he added: “The Chinese have always enjoyed gambling, and Macau is the only place in greater China where [casino] gambling is legal, so I believe the [central] government understands there has to be a place for it [gambling].”
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