Operator News

China – Galaxy outperforms Macau’s growth as profit surges by 67 per cent

By Phil - 2 March 2018

Galaxy Entertainment has outperformed the growth of the Macau casino sector with revenues driven by record increases in mass and an improving VIP sector.

The group reported full year revenue of $62.5bn, up 18 per cent year-on-year and record full year Adjusted EBITDA of $14.1bn, up 37 per cent year-on-year. Full year profit was of $10.5bn, an increase of 67 per cent year-on-year whilst gross gaming revenue grew 19 per cent year-on-year to $258bn with total visitations hitting 32.6m, up five per cent year-on-year.
Dr. Lui Che Woo, Chairman of GEG said: “Our Q4 2017 Adjusted EBITDA outperformed the market by growing 40 per cent year-on-year and 18 per cent quarter-on-quarter to a record $4.2bn. This represents our eighth consecutive quarter of year-on-year EBITDA growth despite the opening of competitive new capacity and Typhoon Hato, the most devastating typhoon in more than 50 years.”

Finishing the year on a positive note, Q4 Group revenue increased 13 per cent quarter-on-quarter to $18bn and Adjusted EBITDA increased 18 per cent quarter-to-quarter to $4.2bn. Galaxy Macau’s Adjusted EBITDA increased 42 per cent year-on-year to $3.4bn. StarWorld Macau’s Adjusted EBITDA increased 18 per cent year-on-year to $751m in Q4. Broadway Macau’s Adjusted EBITDA was $7m Vs $14m in 2016.

Galaxy Macau is the primary contributor to Group revenue and earnings. Revenue in the year was up 17 per cent year-on-year to $44.6bn. VIP Gaming Performance Total VIP rolling chip volume for the year was $621.5bn, up 27 per cent year-on-year. This translated to revenue of $23.1bn, up 18 per cent year-on-year. Q4 2017 revenue was $192bn, increased 50 per cent year-on-year and increased 16 per cent quarter-on-quarter.

Mass gaming revenue at Galaxy Macau increased 19 per cent year-on-year to $16.7bn for 2017. Q4 revenue increased 21 per cent year-on-year to $4.7bn, and increased 12 per cent quarter-on-quarter. Electronic gaming revenue was $1.8bn, an increase of six per cent year-on-year. Q4 revenue was $467m, up six per cent year-on-year and down three per cent quarter-on-quarter.

Dr. Lui added: “Despite increased competition both in Macau and regionally, combined with a number of geopolitical events occurring globally during 2017, we are encouraged to see that Macau is experiencing a continued market recovery. Gross gaming revenue for 2017 was $258 billion, up 19% year-on-year. The average length of stay of overnight visitors was 2.1 days in 2017. The opening of the new Taipa Ferry Terminal and the additional train lines to Zhuhai added to the high speed train network help make it easier to visit Macau. We look forward to the opening of the Hong Kong-Zhuhai-Macau Bridge which will further enhance the appeal and accessibility to Macau for both Chinese and International visitors.”

He pointed to a robust growth development pipeline for the company including developments in Macau, Hengqin, Japan and the Philippines.

In Cotai, Galaxy Macau continues to move forward with Phases 3 & 4, with a strong focus on non-gaming, primarily targeting MICE, entertainment, family facilities and also including gaming. In Hengqin, plans are moving forward to develop a low-density integrated resort to complement its high-energy entertainment resorts in Macau. Galaxy is continuously exploring opportunities in overseas markets, including Japan. In the Philippines, Galaxy is looking to develop a premium quality eco-friendly beach resort on Boracay Island.

“Galaxy continues to outperform the market, generally by significant margins, across all relevant gaming segments. With the high end of the market still performing very well, we look for Galaxy to remain in high growth mode,” said analyst Grant Govertsen.