Galaxy Entertainment Group saw its net revenue fall 5.4% year-on-year to HK$13.17 billion in the three months to 30 June 2019, the decline coming on the back of a 37.9% drop in VIP turnover.
Group-wide, a high win rate of 4.1% kept the decline in VIP to 24.8% or HK$7.33 billion with Galaxy stating that good luck increased Adjusted EBITDA by around HK$349 million, maintaining stability compared with 2Q18 at HK$4.33 billion. On a normalized basis, Adjusted EBITDA was down 11% year-on-year, up 3% quarter-on-quarter, to HK$4.0 billion.
By comparison, mass table drop enjoyed a slight increase for the quarter to HK$30.39 billion with win up 6.3% to HK$7.27 billion. EGM volume declined 8.7% to HK$16.65 billion although win increased 6.1% to HK$607 million.
Galaxy’s flagship integrated resort suffered a 4.2% decline in total net revenue to HK$9.53 billion, although reflecting group-wide results the property recorded a slight increase in Adjusted EBITDA to HK$3.24 billion due to good luck in VIP. Rolling chip volume at Galaxy Macau fell 40.0% to HK$125.05 billion with win of HK$5.50 billion.
Mass table drop and mass win both enjoyed slight increases to HK$18.12 billion and HK$4.99 billion respectively, while EGM volume fell 15.6% to HK$11.24 billion but saw win increase to HK$512 million thanks to a considerably higher win rate than in the prior year period.
StarWorld also saw its total net revenues head south with a 9.9% decline to HK$2.76 billion, while Adjusted EBITDA was down 4.5% to HK$943 million.
Rolling chip volume fell 32.4% to HK$53.91 billion with VIP win down by a similar margin to HK$1.79 billion.
Mass table drop also fell into decline at StarWorld in 2Q19 to HK$8.88 billion although win increased ever so slightly to HK$1.73 billion. EGM volume was the only segment to show growth in volume, up 2.4% to HK$1.97 billion with win of HK$40 million.
Broadway and City Clubs
At Broadway, total net revenue increased by 13.7% to HK$147 million while Adjusted EBITDA tripled from HK$2 million to HK$6 million.
The mass-focused property saw table drop grow 6.5% to HK$343 million and win by 23.7% to HK$73 million. EGM volume fell from HK$516 million to HK$444 million with EGM win slightly down to HK$11 million.
Despite a significant 36.0% fall in rolling chip volume, City Clubs notched an increase in VIP win to HK$35 million on the back of an extraordinarily high 5.0% win rate. Mass table drop and mass table win both increased slightly to HK$3.05 billion and HK$470 million respectively while EGM volume increased 20.4% to HK$3.0 billion with win of HK$44 million.
Commenting on the results, Galaxy Chairman Dr Lui Che Woo said, “The overall market in Macau remains relatively stable despite a decrease in VIP volumes due to increasing regional competition, ongoing trade tensions and a slowing Chinese economy.
“We continue to reallocate our resources to the highest and best use and focus on growing the higher margin Mass business. We have continued to make good progress with our previously announced HK$1.5 billion property enhancement program.
“We believe these property enhancements will ensure the continuing attractiveness and competitive position of both Galaxy Macau and StarWorld Macau. In the shorter term, some customer disruption will occur but medium term the program will create shareholder value.”
Galaxy also announced a 1H19 dividend of HK$0.46 payable on 25 October 2019.