Galaxy sparks gaming stocks rally after third quarter profit soars 28 per cent to beat estimates

Macau gaming shares jumped across the board on Wednesday after Galaxy Entertainment’s third quarter earnings topped estimates, with the casino operator reporting a growing number of overnight visitors and virtually full occupancy at its hotels in the world’s gambling hub.

The company, owned by billionaire mogul Lui Che-woo, saw its shares leap as much as 3.8 per cent to top a 14-month high of HK$32.65 in afternoon trading, before easing back to close up 1.91 per cent at HK$32.05.

The results prompted an industry-wide rally in its peers, with MGM China rising 1.37 per cent, Wynn Macau ahead 0.98 per cent, and Sands China ending the day 1.28 per cent up.

Adjust earnings before interests, taxes, depreciation and amortisation, or EBITDA, a crucial gauge on a casino operator’s profitability, soared 28 per cent to HK$2.7 billion from a year earlier, outstripping market estimates of HK$2.52 billion, and up 18 per cent quarter-on-quarter. Revenue rose 5 per cent to HK$12.9 billion.

The gaming giant said hotel occupancy rates at its key properties Galaxy Macau and StarWorld Macau stood at 98 per cent, while Broadway Macau, a family friendly resort, had enjoyed full capacity for the three months ended September 30.

“The recently reported growth in monthly revenue in August and September followed by a strong ‘golden week’ in October are encouraging signs, but we would like some more time before calling it a definitive trend,” the company said in a statement.

Galaxy’s earnings added further cheer to the current bullish mood of Macau casino operators following the openings of Wynn Macau’s multibillion dollar luxury project Wynn Palace in late August and Sands China’s mass-market friendly The Parisian resort.