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Records fall and revenues soar for Galaxy in 2017

Thursday, 01 March 2018 06:26
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A record year in the mass market segment helped Galaxy Entertainment Group (GEG) increase its revenue by 18% in 2017 to HK$62.5 billion, led by another impressive performance from flagship property Galaxy Macau.

Total gaming revenue increased 17% for the year to HK$58 billion, including a 17% increase in mass gaming revenue to a new high of HK$24.2 billion. VIP revenue was also on the move, up 19% year-on-year to HK$31.6 billion.

Records fell all around for GEG, with Galaxy Macau also announcing record FY17 revenue and Q4 Adjusted EBITDA as the company continued to gain Macau market share.

Group-wide Adjusted EBITDA increased 40% in the fourth quarter to HK$4.2 billion and 37% for the full year to HK$14.1 billion, with profit attributable to shareholders increasing 67% to HK$10.5 billion.

“2017 was a year of sustainable and growing revenues with a continued commitment to delivering memorable customer experiences across our resorts,” said GEG Chairman, Dr Lui Che Woo. “Our focus on operational execution in general and growing our mass and premium mass businesses specifically has been rewarded with the group reporting full year revenue of HK$62.5 billion.

“Our Q417 Adjusted EBITDA outperformed the market by growing 40% year-on-year and 18% quarter-on-quarter to a record HK$4.2 billion. This represents our eighth consecutive quarter of year-on-year EBITDA growth despite the opening of competitive new capacity.”

Galaxy Macau was the main contributor to group earnings, with revenue up 17% year-on-year to HK$44.6 billion. Adjusted EBITDA was up 31% year-on-year to HK$11.1 billion, despite bad luck reducing Adjusted EBITDA by around HK$35 million. Normalized 2017 Adjusted EBITDA grew 39% year-on-year to $11.2 billion.

Mass gaming revenue at Galaxy Macau grew 19% year-on-year in 2017 to HK$16.7 billion while VIP rolling chip volume of HK$621.5 billion represented a 27% year-on-year increase. VIP revenue was HK$23.1 billion, up 18% year-on-year.

At StarWorld, revenue grew 20% to HK$14.2 billion, while Adjusted EBITDA was up 38% year-on-year to HK$3.0 billion. The results included a 15% rise in mass revenue to HK$5.6 billion with VIP rolling chip volume increasing 30% year-on-year to HK$278.6 billion for revenue of HK$8.2 billion, up 24% year-on-year.

A combination of bad luck and the impact of Typhoon Hato, which forced the closure of casino facilities for a month, saw revenue at Broadway Macau fall 24% year-on-year to HK$514 million. Adjusted EBITDA was HK$10 million for 2017 versus HK$30 million in 2016.

The outlook is just as positive for GEG, according to analysts, with Union Gaming’s Grant Govertsen stating, “As has been the case over the past many quarters, 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.

“It is important to note that growth in gaming volumes was similar for both Cotai and the peninsula. Separately, and further demonstrating that Galaxy continues to fire on all cylinders, same-store retail sales at Galaxy Macau were up more than 20% year-on-year. 

“For 2018, we are expecting Galaxy to remain a market leader in terms of gaming growth, with total GGR growing 20% (versus the market in the mid-teens), including VIP +26% and mass +13%.”

Galaxy said it will soon release details of Galaxy Macau Phases 3 and 4, which are currently under construction. Phase 3 is tipped to open by the end of 2019. The company added that it “continues to make progress with our concept plan for our Hengqin project. Hengqin will allow GEG to develop a leisure destination resort that will complement our high-energy resorts in Macau.”


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