Casino developer Galaxy Entertainment Group is 'cautiously confident' about Macau's prospects for this year after first-quarter business at its flagship StarWorld hotel-casino returned to levels not seen since 2007. Galaxy yesterday reported HK$204 million in earnings before interest, tax, depreciation and amortisation (ebitda) at StarWorld for the period. This was a 15.9 per cent increase from a year earlier and a 30.8 per cent rise quarter on quarter after recent cost-cutting measures. 'Overall, the economy in general, and Macau gaming in particular, is enjoying a small recovery,' vice-chairman Francis Lui Yiu-tung said. 'We were hit hard in the second half of last year ... but I'm cautiously confident for this year.' Strong VIP gaming volumes lifted StarWorld's first-quarter revenue 9.3 per cent from a year earlier and 3 per cent from the previous quarter to HK$2.003 billion. Bets placed by high rollers rose 2.4 per cent quarter on quarter to HK$55 billion. Galaxy won back 2.8 per cent of those wagers - within its expected 'win rate' range - for net VIP winnings of HK$1.55 billion. Galaxy in early February implemented an effective 13.3 per cent pay cut for 2,400 gaming staff through an unpaid leave programme. As a result of the pay cuts and other cost-cutting measures, StarWorld's ebitda margin improved for the third consecutive quarter, rising to 10.2 per cent from 8 per cent in the fourth quarter. For all of last year, Galaxy booked a net loss of HK$11.39 billion mainly because of a previously announced write-down of the value of its gaming licence, which it said yesterday totalled HK$12.33 billion for the year after an HK$8.2 billion initial write-down in September. The non-cash measure reduced the carrying value of the licence to HK$1.43 billion at the end of last year, down dramatically from HK$14.47 billion a year earlier. However, it relieved Galaxy's amortisation burden and better positioned the company to report a net profit in the future. Group revenue was HK$2.62 billion in the first three months, unchanged from the previous quarter. Companywide ebitda was HK$233 million, an increase from HK$180 million in the fourth quarter last year and a trough of HK$99 million in the third quarter. Shares in Galaxy rose 8.12 per cent following yesterday's midday earnings release to close at HK$1.73.