Galaxy Entertainment reported a ninefold jump in first-half net profit and a 159 per cent increase in EBIDTA, surpassing analyst expectation as its Galaxy Macau property boomed in popularity.
Despite Macau’s GGR being threatened by a general softening of consumer spending, half year revenue doubled year-on-year to HK$28.3bn for Galaxy with analysts believing the operator remains well positioned due to the high footfall on Macau’s ever-developing Cotai strip.
Lui Che-woo, Chairman of GEG said: “I’m delighted to report another set of strong results based on years of commitment and hard work from everyone in the Galaxy family. The handsome returns achieved over many years are being reinvested wisely in the business to sustain long-term growth and enable GEG to deliver on its vision to become ‘globally recognised as Asia’s leading gaming and entertainment corporation’.”
“Understanding the importance of building a long-term sustainable future for Macau, moving forward GEG strives to play an active role in promoting well-being of the community and safeguarding the environment, particularly through education, sports development and community services.”
“We are confident that GEG will continue to deliver results. The accelerated construction of Galaxy Macau Phase 2 was announced in April 2012. Based on our ‘World Class, Asian Heart’ philosophy, we believe it will serve as a major catalyst for growth for GEG and Macau, attracting customers from across the region and the world.”
In the first six months of 2012 Galaxy achieved revenue of HK$28.3bn due mainly to a full 12 month contribution from Galaxy Macau and a strong underlying performance from StarWorld. A key factor in the Group’s improved earnings is the solid performance of both properties in the mass market. Galaxy Macau mass market revenue grew 36 per cent from the second half of 2011 to HK$3.3bn in the first half of 2012. StarWorld registered a 52 per cent increase year-on-year to just over HK$1.1bn.
Galaxy has further enhanced its gaming and entertainment offering in Cotai by opening two new luxurious Sky casinos, the Pavilion High Limit Slots, an additional VIP room, and its private members club China Rouge, among others.
Galaxy plans to virtually double the size of Galaxy Macau with the accelerated rollout of Phase 2 timed to coincide with the completion of major infrastructure developments in the greater Macau region. Phase 2 will be the next major project to complete in Macau in mid-2015. It will include two new luxury hotels, including The Ritz-Carlton’s first ever all-suite hotel and the world’s largest JW Marriott with an aggregate of 1,300 rooms and suites for a grand total of over 3,600 rooms & suites across five luxury hotels, over 100,000 square metres of retail space with over 200 high end retail outlets, an additional 45 food & beverage outlets, expanded meeting, event and banquet space seating over 3,000 guests and greatly enhanced leisure amenities, with the world’s largest skytop wave pool resort deck being expanded. Gaming capacity will be expanded by up to 500 tables and over 1,000 slots. StarWorld, the Group’s flagship property on the Macau peninsula, once again achieved encouraging results by posting its 16th consecutive quarter of EBITDA growth in the second quarter of 2012.
“Despite the challenging global economic environment, GEG remains confident that the growth prospects for the industry and Macau as a whole are healthy,” Mr. Che-woo added. “Our confidence stems from the positive impact we expect to see in Macauas a number of major infrastructure projects reach completion in the next few years including the Hong Kong-Zhuhai-Macau bridge set to open in 2016 and the Light Rail Transit connecting Macau, Taipa and Cotai due to open 2015 to 2016, among others, and the completion of complimentary projects in Hengqin Island such as the theme park. New infrastructure projects will continue to enlarge Macau’s addressable customer base and drive Macau visitation ever higher. GEG’s well-balanced portfolio of properties and businesses, the earnings potential of its Phase 2 expansion plans and ownership of the largest contiguous casino resort permitted land bank in Macau, position us well to realise our goal to be ‘globally recognised as Asia’s leading gaming and entertainment corporation.”