By Andrew W Scott
Galaxy Entertainment Group on Thursday reported selected unaudited results for 2017 Q1. Galaxy’s Q1 revenue came in at HK$14.1 billion, up 5% year-on-year. The quarter’s adjusted EBITDA was HK$3.2 billion, up a massive 31% year-on-year, primarily as a result of improved cost controls by the company.
Galaxy Macau, StarWorld and Broadway respectively contributed HK$10.2 billion, HK$3.1 billion and HK$135 million towards revenue, and HK$2.6 billion, HK$649 million and HK$6 million towards EBITDA.
Mass table games revenue was HK$5.8 billion, up 15% year-on-year, while VIP revenue was down 5% year-on-year to HK$6.8 billion. This near parity is a result of concerted efforts by the company to focus on the mass market and reduce their reliance on VIP revenues.
In IAG’s opinion, COO Kevin Kelley, who has been with Galaxy since September 2015, has played a significant role in GEG’s improved mass market result with his vast experience in mass market operations in Las Vegas helping fulfil Vice-Chairman Francis Lui’s mass market vision.
Hotel occupancy was 97% across the company’s 4,278 rooms in seven hotels (Galaxy Hotel, Broadway, StarWorld, Ritz-Carlton, JW Marriott, Banyan Tree and Hotel Okura) — 97% for Galaxy Macau’s 3,459 rooms, 98% for StarWorld’s 505 rooms and 100% (rounded to the nearest percent) for Broadway’s 314 rooms.
GEG Chairman Dr Lui Che Woo said, “We continue to drive each and every segment of our business with a particular focus on yielding our resorts and delivering profitable volumes. Our emphasis on executing our renowned ‘World Class, Asian Heart’ service combined with our unique and world-class resorts have delivered memorable customer experiences and resulted in our portfolio of hotels being virtually 100% occupied during the period even as recent new competitive capacity continues to ramp up.
“I am pleased to report that on 28 April 2017 we paid another special dividend of HK$0.26 per share, a 73% increase compared to April 2016. We continue to carefully manage our capital allocation with a view to the development of Cotai, Hengqin and international opportunities. To further support our international expansion ambitions in Asia including Japan, we are pleased to announce the strategic partnership with Monte-Carlo SBM.
“The continuing growth in the emerging middle-class in the Mainland and their appetite for leisure, tourism and travel gives us continued confidence in the longer term outlook for Macau. GEG is embarking on its next growth program and will soon commence construction of Cotai – The Next Chapter, which will include hotel, MICE, entertainment and gaming. GEG has the largest and most well-defined development growth pipeline of all Macau concessionaires.”
The company announced that plans for their Hengqin development continue to move forward as a leisure destination resort to complement the Macau-based entertainment resorts. The company anticipates disclosing further details later in 2017.
Galaxy’s strategic partnership with Monte-Carlo SBM (of which it owns 5%) to explore the development of Integrated Resorts in Asia, including Japan, will go a long way to answering Galaxy critics who, rightly or wrongly, point to a lack of international experience for the company.
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