Galaxy Entertainment Group (GEG) today reported a 45% increase in revenue year on year in its unaudited results for the first quarter of 2011. Group results continue to be driven by StarWorld Hotel & Casino, the company’s flagship, VIP-focused property on Macau peninsula.
StarWorld accounted for 86.5% of group revenue in 1Q 2011. The property generated HK$4.953 billion of the group’s HK$5.726 billion revenue in the quarter. The company attributed StarWorld’s continuing strong performance to its focus on quality service. StarWorld produced quarterly VIP rolling volume of HK$151 billion, an increase of 48% over Q1 2010. GEG’s dependence on a single property is expected to end however from mid-May when Galaxy Macau, the company’s integrated resort on Cotai, opens.
Group revenue results represented an increase of 45% over the first quarter of 2010. Group EBITDA (earnings before interest, taxation, depreciation and amortisation) was HK$712 million in 1Q, up 71% year-on-year. It also represented the tenth consecutive quarter of group EBITDA growth.
StarWorld’s EBITDA margin for the quarter was 13%, compared to 11% in 1Q 2010 said the company. Under US GAAP (generally accepted accounting principles), the EBITDA margin would be 23%, compared to 18% in 1Q 2010 added GEG. StarWorld’s hotel room occupancy rate was 97% in the first quarter of 2011.
“The property continues to deliver an improving annual ROI [return on investment] of 69% as of Q1 2011—based on the total EBITDA for the latest twelve months ended March 31st, 2011 divided by the total investment, including land cost,” said the company in a statement to the Hong Kong stock exchange.
City Clubs, a portfolio of Galaxy-licensed but independently owned Macau casinos, continued to make a valuable contribution to the Group, said the company. EBITDA for the quarter was HK$57 million, compared to HK$30 million in 1Q 2010.
GEG’s Construction Materials Division—the original core business of Galaxy’s controlling shareholders the Lui family—remained steady with EBITDA of HK$68 million for the first quarter in 2011, compared to HK$68 million in 1Q 2010 .
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