Supplier News
China – Galaxy’s revenue drops by 34 per cent in first half
By Phil - 19 August 2015
Galaxy Entertainment’s first half revenue was down by 34 per cent due to what it described as ‘challenging market conditions.’
The operator, who recently opened Broadway Macau at its expanded Galaxy Macau resort, saw revenues fall by 31 per cent at Galaxy Macau and 42 per cent at its Starworld casino. Despite being open for just 35 days during the second quarter, Broadway Macau delivered revenues of $64m.
Dr. Lui Che Woo, Chairman of GEG said: “Market conditions within Macau remain challenging; however GEG announced credible financial results for the first half, after the successful on time and on budget opening of Galaxy Macau Phase 2 and Broadway Macau. The expansion was only operational for 35 days within the reporting period and we continue to ramp up the performance and open additional facilities to further boost the appeal to the mass market.
“As anticipated, customers’ spending behaviour across the market remains cautious, resulting in lower year-on-year revenues for the Group. As a result, earnings at GEG in the second quarter were partially impacted by lower revenues and the opening preparation costs of Galaxy Macau Phase 2 and Broadway Macau, including the additional staff costs in the lead up to the grand opening. Management has and will continue to focus on driving efficiencies, exercising rigorous cost controls and adapting our product offering to meet evolving market conditions.
“The launch of Galaxy Macau Phase 2 and Broadway Macau has been well received and the majority of the resort’s amenities were launched on the opening date,” he added. “A majority if not all of the remaining gaming, retail and F&B outlets are expected to be opened by year end. We continue to execute operationally and ramp up the property with a focus on the mass market.”
The expanded mass market focused Galaxy Macau Phase 2 and the brand new family friendly Broadway Macau both opened simultaneously on time and on budget on May 27 2015, bringing GEG’s total investment in Cotai to $43bn.
Galaxy added that it was pleased that the Macau Government had indicated some flexibility and are open-minded to consider the retention of smoking lounges. “The enabling legislation for the smoking ban is in the committee stage, and could be held up for another year. Allowing smoking lounges would be viewed as a positive for the market. The gaming concessionaires continue to work together for a pragmatic solution,” the group said.
