Operator News
China – Galaxy continues to surge in first half of 2018
By Phil - 7 September 2018
Galaxy Entertainment report first half Net Revenue of $28.1bn, up 25 per cent year-on-year with EBIDTA up 34 per cent year-on-year.
During 1H 2018, GEG experienced bad luck in its gaming operations which decreased its Adjusted EBITDA by approximately $229m. Normalized 1H 2018 Adjusted EBITDA grew 38 per cent year-on-year to $8.9bn.
Galaxy Macau remains the primary contributor to the Group revenue and earnings. Net Revenue for the first half 2018 was $19.8bn, up 25 per cent year-on-year. Galaxy Macau experienced bad luck in its gaming operations which decreased its Adjusted EBITDA by approximately $302m in 1H 2018. StarWorld Macau’s Net Revenue for 1H 2018 was $6.3bn, up 28 per cent year-on-year. Adjusted EBITDA was $2bn, up 41 per cent year-on-year. Broadway Macau is a unique family friendly, street entertainment and food resort supported by Macau SMEs and does not have a VIP gaming component. Broadway Macau’s Net Revenue in 1H 2018 was $273m, up four per cent year-on-year. City Clubs contributed $54 million of Adjusted EBITDA to the Group’s earnings for 1H 2018, up 10 per cent year-on-year.
Dr. Lui Che Woo, Chairman of Galaxy Entrainment, said: “As Macau continued to recover, the Group reported a 25 per cent year-on-year increase in Net Revenue1 to HK$28.1 billion and Adjusted EBITDA was HK$8.6bn, up 34 per cent year-on-year in the first half of 2018. Net profit attributable to shareholders was HK$7.2 billion for 1H 2018. In addition, the Group delivered a record quarterly Adjusted EBITDA of HK$4.3 billion in the second quarter of the year. This is despite the ramp up of new and existing projects in a competitive market. Also of note is that Q2 GGR is historically softer than Q1 and that the World Cup impacted GGR in the latter part of June and into July. Both second quarter and the first half saw our resorts report hotel occupancy of virtually 100%. These solid results reflect that the Group continued to drive every segment of the business and yield our resorts which translated into record Adjusted EBITDA.”
“We expect the market will continue to shift towards the higher margin Mass Market and the Group is well positioned to capitalise on this trend with its significant development pipeline. We will continue to remain focused on this sector,” he added. “We continue to manage the business with a view to the medium to longer-term horizon and enhance operational efficiencies and reallocate resources to achieve the highest and best use, while at the same time exercising prudent cost control. With a robust development pipeline, GEG is well-positioned for long-term success and remains fully committed to support the Macau Government’s efforts in transforming Macau into a World Centre of Tourism and Leisure.”
The company also believes the opening of the Hong Kong-Zhuhai-Macau Bridge and the extension of the train line will further enhance the appeal and accessibility to Macau for both Chinese and international visitors. On the regulatory side, in response to the smoking bill, it explained that operators were enhancing standards of their smoking lounges on the main gaming floor and installing smoking lounges into VIP rooms that will complete no later than 1 January 2019.
