Casino firm Galaxy mulls acquisitions, spends HK$3.6 billion upgrading
Casino operator says it is considering more acquisitions and that almost HK$3.6 billion was spent on 2nd-phase expansion of Galaxy Macau
Galaxy Entertainment says it is looking for acquisitions in Macau after the region's gaming industry grossed more than 29.59 billion patacas last month, its second highest ever.
Despite a shortened Golden Week holiday in May and the central government's anti-graft initiatives, gaming revenue in Macau rose 13.5 per cent year on year last month and 14.2 per cent in the five months to May.
The casino operator said Macau's prosperity would no longer rely on the gaming industry, and that tourism and exhibition businesses would fuel growth.
As gambling by high rollers remained weak, Galaxy Entertainment chairman Lui Che-woo said the company would improve facilities for general visitors.
"We will opt for more balanced development, strengthening the attractions for general visitors while enhancing facilities for exhibitions and business travellers," Lui said.
"We won't just rely on VIP gamblers. I think our rivals are also following this trend."
Francis Lui Yiu-tung, Lui's son and the group's deputy chairman, said most of the HK$3.6 billion additional budget for the second-phase expansion of Galaxy Macau was used for upgrading decor and facilities to "better cater to market demand".
Francis Lui said the company was adding more slot machines for the mass market as turnover from high rollers fell 2 per cent at Galaxy Macau and 15 per cent at Starworld Hotel & Casino even as the group's first-quarter earnings increased 15 per cent.
For Grand Waldo, which the group recently acquired for HK$3.25 billion, Francis Lui said it would be positioned differently from Galaxy.
He added that the company had not yet decided whether Grand Waldo would focus on the mass market while Galaxy Macau catered to high-end gamblers. The acquisition is set to be completed in the next quarter.
Galaxy group is also considering other purchases.
"Land is the most difficult thing to come by. If we find any good investment opportunity around Galaxy facilities in Cotai, we will expand," said Francis Lui.
Aterro Cortai Marina Da Taipa is a hotel located directly across from Galaxy Macau.
Lui said the company had up to HK$16 billion of cash in hand, enough for planned acquisitions. If more funds were required to finance purchases, the company would borrow money from banks, rather than issue equity, he said.
Separately, Lui Che-woo, the 84-year-old founder of the Galaxy group, said he had not given any thought to retirement but might consider reducing his workload.
Macau casino revenue last year rose 14 per cent to a record 304 billion patacas.