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China – Galaxy falls by eight per cent as VIP dips in first quarter

By - 17 May 2019

The general downturn in VIP gaming felt across Macau has dented the revenues of Galaxy Entertainment which at an unlucky $13bn, were down eight per cent year-on-year and down eight per cent quarter-on-quarter.

Dr. Lui Che Woo, Chairman of GEG said: “Overall given the prevailing market conditions, I believe the Group delivered a solid financial result. During the first quarter, Macau experienced a number of events that impacted the market, most notably in the VIP segment. These included the introduction of the full smoking ban plus increased competition from both local and regional casinos that have a significant economic advantage compared to Macau. We continue to progress with the previously announced $1.5bn renovation enhancement program in both Galaxy Macau and StarWorld Macau. Whilst there has been some disruption, we believe this enhancement program will make our resorts even more attractive to guests. We anticipate to complete this program in the early part of 2020.”

Adjusted EBITDA was $4bn, down eight per cent year over year and down eight per cent quarter-on-quarter.

Dr. Lui added: “We continue with our development works for Phases 3 & 4, and with our planning for a lifestyle resort in Hengqin. We also continue with our efforts in Japan where we have submitted numerous Requests For Information to selected Japanese cities and prefectures. 2019 is an important year for China and Macau with a particular focus on three major events. We are committed to supporting the Macau Government’s vision to develop Macau into a World Center of Tourism and Leisure.”

In the first quarter, Macau’s gaming revenue was impacted by the introduction of the full smoking ban and increased competition from both local and regional casinos. Macau GGR for Q1 2019 was $73.9bn, down 0.5 per cent year-on-year and down three per cent quarter-on-quarter. VIP GGR was $36.1bn, down 13 per cent year-on-year and down 11% quarter-on-quarter.

Galaxy Macau’s Adjusted EBITDA was $3bn, down seven per cent year-on year and down 12 per cent quarter-on-quarter. StarWorld Macau’s Adjusted EBITDA was $949m, down five per cent year-on-year and up six per cent quarter-on-quarter. Broadway Macau’s Adjusted EBITDA was $15m, up 15 per cent year-on-year and up 88 per cent quarter-on-quarter. GEG played lucky in Q1 2019 which increased Adjusted EBITDA by approximately $111m.

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