Galaxy Entertainment Group
POWER SCORE: 5,914
POSITION LAST YEAR: 1
CLAIMS TO FAME
- Built Galaxy into Macau’s de facto local gaming champion
- Developing largest single land plot in Cotai, Phases 3 and 4 due by 2022
- Holds strategic stakes in Monte Carlo casino operator SBM and Wynn Resorts
Like every other operator in Macau, Galaxy Entertainment Group’s earnings have suffered significantly as a result of COVID-19. But unlike its peers in the global gaming hub, the company has not found reason to bolster debt in riding out the pandemic.
Led by the calm, measured strategy of Vice Chairman Francis Lui, Galaxy’s conservative approach to fiscal management is reaping rewards in 2020, even accounting for a 93% fall in 1Q20 EBITDA to HK$283 million (US$36.5 million) and an EBITDA loss of HK$1.37 billion (US$177 million) in 2Q20.
In announcing the company’s second quarter results in August, Lui pointed to cash and liquid investments totaling HK$49.8 billion (US$6.4 billion) and net cash of HK$43.6 billion (US$5.6 billion) as of 30 June 2020, adding that there was no need to consider raising any more liquidity via debt.
Bernstein analysts observed in an early April note that Galaxy was not only the sole Macau operator in a net cash position but also had enough cash reserves to last for a full 40 months in a zero revenue scenario.
There could be other benefits to this strategy too, with Japanese authorities having made it clear in recent times that the financial strength of companies bidding to develop an integrated resort would be one of the key factors in determining who ultimately prevails.
Certainly Galaxy’s stocks have soared in the Japan IR race this year, with two of its key rivals in Yokohama – Las Vegas Sands and Wynn Macau – having pulled out of the race and another, Genting, under serious financial pressure. The company may still flex its financial clout in other prefectures too once policy details are finalized, having so far committed only to exploring its options rather than to any single location.
Meanwhile, Galaxy is powering ahead with its Galaxy Macau Phase 3 (and Phase 4) development, adding Galaxy International Convention Center and its 16,000-seat arena plus another 1,500 hotel rooms to the property’s current 3,500 key inventory.
Galaxy Macau, the brainchild of Lui and his father – Group Chairman Lui Che Woo – already has decent claims to being Macau’s most comprehensive integrated resort. Its six hotels range from top end Ritz-Carlton to budget Broadway, with high quality Asian brands Okura and Banyan Tree among them.
The property’s 120 food outlets offer similar diversity, while its Grand Resort Deck, with 350 tons of white sand and the world’s largest rooftop wave pool, is regularly packed in the warmer months (2020 notwithstanding).
It even offers one of Macau’s very few movie theaters, with the 10 screen UA Galaxy Cinemas enabling mainland visitors to see movies that may be unavailable in theaters back home due to film import quotas.
Remarkably, neither Francis Lui nor his father had any notable gaming industry experience when Galaxy Entertainment Group won a Macau gaming concession back in 2002 – proof positive that an open ear and open mind can take you far.
For the full list of 2020 Asian Gaming Power 50 winners, click here.