By KATE O’KEEFFE
HONG KONG—Galaxy Entertainment Group Ltd. swung to a profit for 2009, as rising visitor demand helped its gambling business rebound in the second half of the year.
The Hong Kong-listed casino operator, controlled by the family of businessman Lui Che Woo, said Tuesday its net profit for the 12 months ended Dec. 31 was $1.15 billion Hong Kong dollars (US$148.2 million), reversing an HK$11.39 billion net loss a year ago, which was due to a massive writedown for the value of its casino license in Macau.
A one-time gain of HK$815 million from a bond buyback also bolstered the 2009 results, which were in line with the average HK$1.11 billion forecast of seven analysts polled by Thomson Reuters.
Galaxy said last week it had completed the long-awaited financing plan for its HK$14.1 billion flagship casino resort in Macau’s Cotai area and reaffirmed the project is on track to open in early 2011, removing a major uncertainty analysts have said weighed on the company’s shares.
The company said Tuesday the size of its loan to finance the project had increased marginally to HK$9.0 billion from the HK$8.8 billion announced last week.
When completed, Galaxy said its casino resort in Cotai—an area of reclaimed land between two outlying islands off the Macau peninsula—will have the capacity to host 600 gambling tables and 2,200 luxury hotel rooms, suites and villas in a 550,000-square-meter facility.
A person familiar with the matter said last week Galaxy would be given permission to put at least 400 new tables in the casino despite the Macau government’s recently announced cap on gambling tables.
The company has offered construction contracts to 1,008 local workers and construction “has begun in earnest,” said Deputy Chairman Francis Lui.
On Monday Steve Jacobs, chief executive of rival Sands China Ltd., said the company wouldn’t reschedule a construction signing ceremony originally planned in March for its major Cotai expansion plan but that it has “several thousand workers under way.”
Galaxy’s revenue rose 16% to HK$12.23 billion from HK$10.52 billion a year earlier. As in 2008, the company didn’t recommend a final dividend.
Galaxy said its VIP-focused StarWorld hotel and casino posted record earnings before interest, tax, depreciation and amortization of HK$346 million in the fourth quarter, which more than doubled over the same period last year and was the property’s sixth consecutive quarter of Ebitda and revenue growth.
“We know we need a broader appeal than just the VIP market,” said Chief Operating Officer Michael Mecca about the company’s Cotai project, which will go head-to-head with enormous resorts run by Sands China parent Las Vegas Sands Corp. and Melco Crown Entertainment Ltd.
He said Galaxy had “conducted the most significant customer research ever done in this part of the world” and learned from competitors’ operations on Cotai, viewed as the future of Macau’s gambling revenue growth by many.
