Galaxy Entertainment Group saw its revenue surge by 32% year-on-year to HK$18.5 billion in the three months to 31 December 2018, despite playing unlucky at its flagship property Galaxy Macau.
Group-wide Adjusted EBITDA grew 36% year-on-year and 4% quarter-on-quarter to HK$4.6 billion, with EBITDA for the past 12 months showing a 38% increase to HK$15.3 billion.
Gaming revenue for the quarter was HK$17.2 billion, up 31% year-on-year, with VIP gaming revenue growing 44% to HK$9.9 billion and mass revenue 17% to HK$6.7 billion. Total electronic gaming revenue was HK$601 million, up 14% year-on-year.
Galaxy Macau performed strongly again, with revenue growing 27% year-on-year and 2% sequentially to HK$13.0 billion. Adjusted EBITDA grew 26% year-on-year to HK$3.3 billion although bad luck in gaming operations wiped around HK$177 million from that figure.
VIP rolling chip volume for 1Q18 at Galaxy Macau was HK$204.9 billion, up 56% year-on-year and up 7% quarter-on-quarter, which translated into revenue of HK$7.2 billion – an increase of 40% year-on-year but down 2% sequentially. Mass table drop grew 18% to HK10.4 billion with revenue of HK$4.5 billion, up 14% year-on-year.
StarWorld Macau saw its revenue jump 44% year-on-year and 22% sequentially to HK$4.5 billion with Adjusted EBITDA rising 55% to HK$1.0 billion.
VIP rolling chip volume was HK$82.3 billion, an increase of 30% year-on-year, with revenue of HK$2.7 billion, up 57% year-on-year and 26% quarter-on-quarter. Mass gaming revenue at StarWorld was HK$1.7 billion for the quarter, an increase of 32% over the same period last year.
Broadway Macau, which is located directly alongside Galaxy Macau but does not offer VIP gaming, produced revenue of HK$142 million, up 5% year-on-year but down 3% quarter-on-quarter. Adjusted EBITDA was HK$13 million versus HK$6 million in the prior year and HK$7 million in 4Q17.
Commenting on the results, brokerage Sanford C Bernstein said they reflect the company’s recent focus on premium play.
“Premium mass was strong at both Galaxy Macau and StarWorld, while grind mass was softer as the company continues to orient its portfolio towards the premium segment and reallocated marketing spend away from grind mass to premium,” said analysts Vitaly Umansky, Zhen Gong and Cathy Huang.
GEG said it is also pushing ahead with plans to build a US$500 million integrated resort in Boracay in the Philippines, despite recent claims to the contrary by Philippines President Rodrigo Duterte who has shut down tourism to the island for six months to address pollution.
“In March 2018, we announced our initial plans to develop a US$300 to US$500 million premium quality, eco-friendly, low density, low rise resort that would include a small casino with up to only 60 tables,” the company said.
“We support the Philippine Government’s decision to temporarily close Boracay and their restoration initiative for the island. We continue to work with our local partner to seek further clarification.”
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