By KATE O’KEEFFE
Dow Jones Newswires
HONG KONG—Galaxy Entertainment Group Ltd. said Thursday its 2011 net profit more than tripled, fueled by the May opening of its casino resort in Macau as well as a surge in gambling revenue in the Chinese territory.
The Hong Kong-listed casino operator, controlled by the family of mogul Lui Che Woo, raised its profile considerably last year with the opening of Galaxy Macau, a US$2 billion-plus complex in Macau’s Cotai area with 450 gambling tables, 2,200 hotel rooms and more than 50 food and beverage outlets. It also features a rooftop wave pool with 350 tons of sand and Macau’s first modern cineplex.
The resort was seen as a major test for the Lui family, who made their fortune in the construction business before entering the casino industry in 2002, and had never before run a property of such enormous scale and scope.
The Luis have passed the test, with the resort receiving high praise from analysts and giving Galaxy a head start on rivals Wynn Resorts Ltd., MGM Resorts International and SJM Holdings Ltd., all of whom plan to build casino resorts in the area when they receive government permission.
Galaxy said its net profit for the 12 months ended Dec. 31 was three billion Hong Kong dollars (US$387 million), up from HK$898.5 million a year earlier.
The result was below the HK$3.32 billion average estimate of 21 analysts polled earlier by Thomson Reuters.
Revenue more than doubled to HK$41.2 billion from HK$19.26 billion, set against a 42% rise in 2011 gambling revenue in Macau to a record US$33.5 billion. Macau, the only place in China where casino gambling is legal, raked in more than five times the gambling revenue of the Las Vegas Strip.
This year, Galaxy and other casino operators in Macau will face more competition from Las Vegas Sands, which plans to begin operations at a large expansion in Cotai this spring. Las Vegas Sands Corp., run by billionaire Sheldon Adelson, already runs the Venetian Macao down the street from the Galaxy Macau, among other properties.
As in previous years, Galaxy didn’t recommend a dividend. Although most of its rivals in Macau have started paying dividends, Chief Financial Officer Bob Drake said Galaxy’s board decided against a payout “because we’re a growth company.” He said the company still has 15 million square feet of land to develop in the area surrounding Galaxy Macau.
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