VIP players help Galaxy win big
Macau gaming operator Galaxy Entertainment Group posted a sharp growth in earnings in the first quarter of this year thanks to a big rise in VIP gaming and a 97 per cent hotel occupancy rate.
The group, controlled by the family of property and construction tycoon Lui Che-woo, reported a year-on-year growth of 71 per cent in earnings before interest, taxes, depreciation, and amortisation (ebitda) to reach HK$712 million, up from HK$417 million in the same period of last year. The figure also represented a 14 per cent rise quarter-on-quarter.
Hong Kong-listed companies are not required to report full quarterly earnings.
Revenue rose to over HK$5.72 billion between January and March, representing an increase of 45 per cent over the same period last year.
The figures helped boost Galaxy's share price by nearly 6 per cent, to close at HK$13.82 on the Hong Kong Stock Exchange yesterday.
Galaxy's performance was better than JP Morgan Securities' forecast of HK$680 million in ebitda.
Galaxy has now seen earnings grow for 10 consecutive quarters thanks to StarWorld, the group's flagship hotel and casino on the Macau peninsula. StarWorld reported an 80 per cent year-on-year ebitda growth in the first quarter of this year, amounting to HK$664 million.
Its quarterly revenue reached HK$4.95 billion by the end of last month, up 48 per cent on last year.
StarWorld's performance in the first quarter was fuelled by a record VIP gambling turnover of HK$151 billion, up nearly 50 per cent over a year ago. Its five-star hotel had a room occupancy rate at 97 per cent.
As one of six licensed casino operators in the former Portuguese colony, Galaxy is going to open its new development Galaxy Macau - a HK$14.9 billion 2,200-room Cotai casino resort - on May 15. The resort will house a HK$600 million entertainment complex with a nine-screen cinema, which is set to open in September.
'We are very confident that Galaxy Macau will attract a new type of customer to Macau,' group chairman Lui Che-woo said in a statement.
JP Morgan analysts Kenneth Fong, Benjamin Lo and Sylvia Chan wrote in a report published last week: 'We are encouraged by the fact that the property will be the only casino opening this year in a very favourable operating environment.
'More importantly, it will be in the very capable hands of what we believe to be a solid management team.'
Galaxy vice-chairman Francis Lui said it hoped the new project's non-gaming facilities would woo new customers and increase visitors' duration of stay from an average 1.5 days to 2.5 days.
'We hope to see revenue growth in our non-gaming business as well, and if our new product is well positioned, we can bring in more families instead of just gaming clients,' Lui said, adding that two-thirds of its Cotai site remained undeveloped.