Galaxy expands budget for flagship's second phase
Group reports doubling in net profits and no VIP fallout from Beijing's anti-graft drive
Casino operator Galaxy Entertainment is increasing its budget for the second phase of Galaxy Macau to HK$19.6 billion from HK$16 billion.
The company expects the second phase of its flagship project on the Cotai Strip to be completed in mid-2015.
Galaxy reported net profit more than doubled last year to HK$7.4 billion from HK$3 billion the previous year. Revenue rose 38 per cent to a record HK$56.7 billion, helped by a growing number of mainland tourists flocking to the world's largest gaming destination.
The company said it planned to invest HK$50 billion to HK$60 billion in the third and fourth phases of Galaxy Macau to expand the resort, targeting premium mass customers. Construction could start from the end of this year, it said.
The third and the fourth phases will provide 5,500 additional hotel rooms and suites, and up to 1,000 gaming tables and 3,000 slot machines.
"We don't need to raise funds for the phase two project as we have enough reserves," chairman and founder Lui Che-woo said. Galaxy had HK$15.6 billion of cash on hand at the end of 2012.
President Michael Mecca said he hadn't seen any evidence of Beijing's anti-graft drive affecting Macau's gaming VIP business "in any way".
"We stay close with our operators and we talk to them all the time. We have not seen any evidence that [the anti-corruption drive] is affecting the growth or the flow of VIP business in Macau," Mecca said.
Galaxy said it expected to see the VIP market "gradually recover" this year and the mass segment gather momentum through the year and beyond.
Galaxy Macau, reported full-year revenue of HK$33 billion last year, while the StarWorld Hotel on the Macau Peninsula reported HK$21.5 billion.
Galaxy had approval from the Macau government to add 50 tables between its two properties, deputy chairman Francis Lui Yiu-tung said. "One-third of the tables will be in the VIP rooms and two-thirds for the mass market," he said.
Shares in Galaxy edged down 0.75 per cent, closing at HK$33.05 yesterday, against a 0.3 per cent gain in the Hang Seng Index.