Mainland gamblers, new casino underpin solid profit rise at Galaxy

Macau casino operator Galaxy Entertainment, posted a forecast-beating nine-fold rise in half-year net profit, boosted by a new casino and a steady flow of Chinese visitors keen to try their luck in the world’s largest gambling destination.

Although China’s economic slowdown is threatening to rein in the flow of visitors that made Macau one of the fast-growing economies in 2011, Galaxy is seen as better placed to weather any drop-off as it owns the newest resort on Macau’s glitzy Cotai casino strip.

Galaxy, a US$12 billion company controlled by Hong Kong property and construction tycoon Lui Che Woo and 13 per cent owned by European private equity firm Permira, reported net profit of HK$3.45 billion (US$445 million) for the first six months of the year.

That was up from HK$378.3 million in the same period a year ago and above an average forecast of HK$2.8 billion from 5 analysts polled by Reuters.

With gambling revenues still rising, albeit at a much slower pace, and armed with the biggest piece of property on Macau’s Cotai strip, Galaxy is now investing $2 billion in the second phase of its new Galaxy Macau resort which opened last year.

The new phase will double Galaxy’s size on Cotai at a time when rivals such as Sheldon Adelson’s Sands China are also building new properties.