Galaxy Entertainment's new Cotai casino hotel saw HK$50 billion in bets on its high-stakes baccarat tables during its first 47 days in business - more than HK$1 billion a day.
But despite the boost from the property, which opened in May, the Macau casino operator controlled by the family of property to construction tycoon Lui Che-woo said first half net profit dropped 20.4 per cent due to pre-opening expenses.
Profit in the first six months fell to HK$378.75 million, down from HK$474.98 million a year ago, mainly due to HK$766.76 million in one-off charges related to the opening.
Stripping out those charges, as well as other one-time non-cash expenses, adjusted net profit rose 115 per cent from a year ago to HK$1.31 billion. First-half revenue rose 60 per cent to HK$13.57 billion.
Galaxy said yesterday the final budget for the 2,200-room resort rose 7 per cent to HK$16.5 billion.
Galaxy's pre-opening charges came in at the high end compared to the openings of the other two major Cotai properties. Melco Crown Entertainment booked US$61.3 million in pre-opening expenses on the debut of its City of Dreams resort in the second quarter of 2009, while Las Vegas Sands booked US$90.4 million in the third quarter of 2007, when the Venetian Macao opened its doors.
Still, core cash flow soared with the launch of Galaxy's new flagship.
Earnings before interest, tax, depreciation and amortisation (ebitda) rose 84 per cent in the first half to HK$1.82 billion, up from HK$990.47 million a year ago. As usual, high-stakes VIP revenue drove the rally.
The addition of Galaxy Macau to the company's five-year-old StarWorld casino boosted total VIP gambling chip turnover to more than HK$200 billion in the second quarter.
StarWorld saw a record HK$158 billion in VIP chip wagers in the April to June period, up 22 per cent from a year ago and 5 per cent from the first quarter of the year. The casino kept 2.9 per cent of those bets for net VIP winnings of HK$4.5 billion.
The continued growth at StarWorld suggests the launch of Galaxy Macau has yet to cannibalise the older property's business. Cannibalisation was seen at Las Vegas Sands' Sands Macao casino on the opening of the Venetian, and at Melco Crown's Altira casino after it opened the City of Dreams.
Galaxy Macau kept a luckier-than-average 3.5 per cent of its HK$50 billion in VIP wagers in its first 47 days. That left it with net VIP winnings of HK$1.78 billion.
Mass market table games revenues at Galaxy Macau, which yield a higher profit margin than the VIP segment, were HK$410 million for the half-quarter, compared to HK$366 million at the smaller StarWorld for the full second quarter.
Galaxy said the new Cotai property opened with 7 VIP rooms, and added three more by the end of June.
The new VIP rooms brought in new junket agents - the middlemen who issue credit to gamblers and collect their debts in exchange for a commission from the casino.
To help junkets bankroll gamblers and boost volumes, casinos usually advance agents around a month's worth of commissions.
Largely as a result of issuing new credit to junkets, the amount owed to Galaxy from 'non-trade' debtors more than doubled with the opening of the Cotai casino, rising to HK$885.57 million as of June from HK$413.63 million at the end of December.