Supplier News
China – Galaxy reports best quarter in two years despite plateauing GGR
By Phil - 26 October 2016
Macau casino operator Galaxy Entertainment Group reported a 28 per cent increase in third-quarter net profit, as its investment in non-gaming projects helped attract visitors.
Profit for the quarter ended September came in at HK$2.7bn ($348.13m) marking its best performance in two years. Revenue increased by five per cent to HK$12.9bn. Gross Gaming Revenue increased by just one per cent year-on-year to HKD53.4bn in Q3 2016 but hotel occupancy across the group’s portfolio was 98 per cent or higher.
Dr. Lui Che Woo, Chairman of GEG said: “We believe that the market trend towards mass has continued with total mass GGR now exceeding VIP GGR. Total visitor arrivals in Q3 this year grew marginally by 0.1 per cent year-on-year to 8.1m and the average length of stay of visitors grew by 0.1 day year-on-year to 1.3 days. Importantly in Q3 2016 overnight visitors grew by nine per cent year-on-year to 4.2m due most likely to the opening of additional hotel rooms. Overnight visitors typically spend significantly more on high margin non-gaming services.”
“We have enjoyed a solid Q3 this year with reported Group Adjusted EBITDA of HKD2.7 billion up 28 per cent year-on-year and up 18 per cent quarter-on-quarter,” he added. “Macau continues to transition to the Mass market and GEG continues to align our business with the direction of the market and allocate resources to their highest and best use. We are encouraged by the continuing signs of market stabilization, yet it remains too early to call the bottom of market. The recently reported growth in monthly revenue in August and September followed by a strong Golden Week in October are encouraging signs, but we would like some more time before calling it a definitive trend. Underlying visitor demand remains solid with GEG’s hotels remaining virtually fully occupied during the period.
“The opening of additional hotel rooms and resort related amenities at Galaxy Macau Phase 2 and Broadway Macau in 2015 saw an increase in the number of visitors who stayed overnight. Importantly, visitors whom stay overnight generally have a higher spend per customer, with a particular focus on higher margin, non-gaming spend. GEG remains a growth company with the largest contiguous landbank in Macau. We continue to progress with our exciting development plans and hope to be able to make a formal announcement in the near future.”
