Inside Asian Gaming

June 2009 | INSIDE ASIAN GAMING Briefs statement to the local media. The offshore casino operators say they are challenging the Goa government’s decision. At present, six offshore casinos are moored in the Mandovi River and one more is expected to arrive and begin operations later this year, said Mr Nair. The casinos have faced stiff opposition from the Bharatiya Janata Party (BJP) and civil society groups that have demanded that the government order the vessels out of the state, according to media reports. Galaxy says it’s getting results Hong Kong-listed Galaxy Entertainment Group recently announced its 2008 annual results for the year ended 31st December, as well as selected unaudited Q1 2009 results. Galaxy posted earnings before interest, taxation, depreciation and amortisation (EBITDA) of HK$544 million in 2008. The company said it had recorded three consecutive quarters of growth, including HK$233 million in Q1 2009 EBITDA—a 29% rise on the previous quarter. Bob Drake, Galaxy’s Chief Financial Officer, said the company was very pleased with the improvement in EBITDA margin. “It’s associated with things like our cost savings initiative and managing other things pretty aggressively such as labour and marketing, along with other programmes,” Mr Drake told a press conference held in Hong Kong to announce the results. Mr Drake added that the significant improvement in EBITDA margin for CityClubs was the result, as reported in our March issue, of changing a revenue sharing deal with CityClubs’ external owners to a top line deal. VIP volumes grew 17% to HK$55 billion against what Galaxy described as a market decline of 22%. Galaxy said its gaming market share in 2008 increased from 10% to 13%. Group revenue was HK$10.5 billion in 2008 and HK$2.62 billion in the first quarter of 2009. There was a loss attributable to shareholders of HK$11.39 billion in 2008, largely due to a HK$12.33 billion non-cash write-down of the intangible gaming licence. Galaxy said an operational efficiency programme was ‘well advanced’ and was expected to generate savings of HK$200 million per annum. Galaxy said the bond buy back programme the company concluded in January had reduced debt and interest payments and strengthened the balance sheet, with US$50 million of convertible bonds repurchased. The company added it had cash reserves of HK$4.7 billion. GEG reiterated that construction of its Cotai integrated resort continued and that it would time the interior fitting and subsequent opening of the property to the public for when market conditions improved. The company identified four major events in 2009 that in its view will support the continued growth of Macau. “These are the election of a new Chief Executive of Macau, the election of a new legislative assembly, the celebration of the 60th anniversary of the establishment of the People’s Republic of China and the 10th anniversary of Macau’s return to China sovereignty. The Group believes these important events will be a catalyst for driving growth and development of Macau,” Galaxy said in a media release to accompany the results. Wynn lose Wynn Resorts Ltd issued its Q1 2009 results last month. Net revenues globally for the first quarter of 2009 were US$740.0 million, compared to US$778.7 million in the first quarter of 2008. The decline was driven primarily by 8.7% lower revenues atWynn Macau, said the company. Consolidated adjusted property EBITDA decreased 19.9% to US$158.5 million for Q1 ‘09, compared to US$197.8 million in Q1 08. On a US GAAP (Generally Accepted Accounting Principles) basis, the company said net loss for the quarter was US$33.8 million, compared to net income of US$46.7 million in the same quarter of 2008. Adjusted net loss in the first quarter of 2009 was US$30.1 million, compared to an adjusted net income of US$78.2 million in Q1 ‘08. Wynn said its Q1 ’09 net revenues were US$448.7 million, compared to US$491.5 million in Q1 ‘08. Wynn Macau generated adjustedproperty EBITDAof US$114.6million, compared toUS$129.4 million in Q1 ‘08. Table games turnover in the VIP segment was US$10.7 billion for the period, compared to US$14.8 billion for Q1 ‘08. VIP table games win as a percentage of turnover (calculated before discounts and commissions) for Q1 ’09 was 3.6%, higher than the 3.0% experienced in the 2008 period and above the expected range of 2.7% to 3.0%. Tablegamesdropinthemass-marketcategorywasapproximately US$502.3 million during the period, a 15.3% decrease from US$592.7 million in the first quarter of 2008. Mass market table games win percentage (calculated before discounts) of 22.1% was above the expected range of 18% to 20% and higher than the 19.7% achieved in Q1 ‘08. Slot machine win increased 41.2% compared to Q1 ’08 and win per unit of US$440 was 42% higher than Q1 ‘08. The company said construction continues on a further expansion of Wynn Macau. Encore at Wynn Macau is expected to open in 2010, adding a fully integrated resort hotel to Wynn Macau with approximately 400 luxury suites and four villas. The current project budget is US$700 million. Galaxy’s StarWorld Hotel & Casino Wynn Macau 61