Profits up 6 percent in Q1
Galaxy Entertainment Group Ltd. has seen earnings soar 22 percent year-on-year for the second quarter of the year, surpassing analyst expectations.
Adjusted EBITDA was HK$2.3 billion (US$297 million), compared with the HK$2.25 billion median estimate of five analysts surveyed by Bloomberg News. Macau’s largest casino operator by market share also reported a 6 percent jump in profits for the first quarter.
The numbers have been attributed to the positive response to Galaxy Macau’s Phase II expansion and Broadway Macau, which opened on the Cotai Strip last spring. Those developments helped Galaxy sprint past Sands China Ltd. in the first half to become the city’s largest casino operator with a 23 percent market share, according to Daiwa Capital Markets. That lead may not hold as new resorts open, including Sands China’s Parisian Macao, due to debut this month.
The company’s “key growth catalysts would be the further ramp-up of Galaxy Phase II,” said Nomura International analysts. “Longer term, growth hinges on the roll-out of Galaxy Phases III and IV, which are unlikely to come online before 2019.”
Like other operators in the world’s top gaming hub. Galaxy has observed a shift in the industry toward mass-market gamblers. Its first-half mass-market segment revenue rose 22 percent to HK$10 billion compared to a year earlier, reported Bloomberg. In the same period, VIP gambling dropped 15 percent to HK$13.2 billion.
Galaxy Chairman Lui Che-Woo has said in he plans to add family-friendly theme parks at future resort projects—a sure sign he’s going for the mass gambler and mainstream tourist.
The company also announced a special dividend of HK$0.18 per share, to be paid at the end of October.
Sanford C. Bernstein analysts said the company “could still be more aggressive in its return of capital to shareholders, especially if it were to take on more debt to fund future developments, thus freeing up free cash flow for dividends.”
