Chinese VIPs bring better-than-expected 2017 revenue for Galaxy Entertainment
Net profit of Macau-based casino operator Galaxy Entertainment Group (GEG) soared 67 percent in 2017 as Chinese high rollers return to the premier gambling hub.
In a disclosure to the Hong Kong Stock Exchange, GEG announced that the company posted a better-than-expected net profit of HK$10.5 billion (US$1.34 billion) in 2017 compared with HK$6.3 billion (US$804.88 million) in 2016.
GEG’s revenue also rose 18 percent to HK$62.5 billion ($7.98 billion) in 2017, beating analysts’ estimates of over HK$61.2 billion ($7.8 billion).
Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), a key measure in the heavy-asset gaming sector, jumped 37 percent on the year to HK$14.1 billion ($1.8 billion).
“Despite increased competition both in Macau and regionally, combined with a number of geo-political events occurring globally during 2017, we are encouraged to see that Macau is experiencing a continued market recovery,” Galaxy Entertainment chairman Lui Che Woo said in a statement.
Woo attributed the stellar performance of GEG to speedy growth in its VIP and mass segments as Macau’s gambling market continues its recovery.
GEG’s overall gaming revenue expanded 17 percent to HK$58 billion ($7.41 billion) last year compared with HKD 49.5 billion ($6.32 billion) in 2016. Total mass market table games revenue was HK$24.2 billion, up 15 percent year-on-year and total VIP revenue was HK$31.6 billion, up 19 percent from the prior year period.
GEG’s flagship property Galaxy Macau had a solid year, with revenue gaining 17 percent to HK$44.6 billion ($5.7 billion) while its adjusted EBITDA was up 31 percent to EBITDA of HK$11.1 billion ($1.42 billion).
Meanwhile, the StarWorld Macau property chalked a 20 percent revenue growth in 2017 as both VIP and mass gaming revenue saw 24 and 15 percent increases, respectively. Data showed that its full year revenue was HK$14.2 billion ($1.81 billion).
The family-friendly Broadway Macau property, which lacked any VIP gaming tables, saw a reversal of fortune last year after a breakout performance in 2016, with its full-year revenue tumbling 4 percent year-on-year, to HK$514 million ($65.6 million).
Looking forward, GEG announced that it plans to initially spend around US$500 million for the construction of an eco-friendly beach resort on Boracay Island in collaboration with the Philippine-listed holding company Leisure and Resorts World Corp.
It also is seeking project opportunities in Japan as the first world nation opens its doors to casino gambling.
“In the medium to longer term, tourist markets in mainland China and Asia remain dramatically underpenetrated, offering opportunities for significant growth in tourism, leisure and travel,” Lui said.
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