Macau casino operator Galaxy Entertainment Group (GEG) has followed up its record-breaking Q1 with an equally shattering Q2. Revenue over the first six months of 2014 rose 25% to HKD 38.4b (US $5b) while profit rose 29% to HKD 6b ($774.1m), another all-time high. Company chairman Lui Che Woo (pictured) celebrated GEG’s boffo earnings and its 10th anniversary dealing cards in Macau by establishing the HKD 1.3b GEG Charitable Foundation on July 4.
GEG’s flagship Galaxy Macau property reported all-time high rolling chip volume of HKD 264.3b (US $34.1b) in the three months ending June 30, up 40% over the same period last year. VIP win was off a mere 0.1 points to 3.2%, resulting in VIP win of HKD 8.4b, also up 40% year-on-year (but down 4% sequentially). Galaxy Macau’s mass market table drop was up a mere 1% but mass win was up 19% to HKD 3b (down 9% sequentially) thanks to a 6.4 point gain in win to 43.5%. Electronic gaming machine (EGM) turnover rose 13% while win was flat at HKD 384m. Non-gaming revenue rose 3% year-on-year to HKD 744m.
Over at StarWorld Macau, VIP turnover was up 4% but win rate fell 0.6 points to 2.5%, resulting in an 11% year-on-year revenue decline (23% sequentially) to HKD 4.3b. Mass revenue rose 28% to $1.1b as table drop rose 8% and win gained 5.4 points to 37.6%. EGM revenue fell 11% to HKD 100m while non-gaming revenue was flat at HKD 181m. GEG’s City Clubs branded casino business contributed earnings of HKD 92m, down from HKD 94m last year at this time.
GEG acknowledged that the 2014 FIFA World Cup had “proved a distraction” for some Macau gamblers but the company says “sentiment and spending” are showing signs of improving and the “fundamental drivers” behind Macau’s growth remain unchanged. The company’s cash position improved by HKD 4b during H1 while debts fell 15% to HKD 541m.
Looking forward, Phase 2 of Galaxy Macau remains on budget and on schedule to open in mid-2015. Renovations on the recently acquired mass-market focused Grand Waldo Complex are expected to be done by the end of this year with a reopening planned for early 2015. GEG is still developing conceptual plans for its resort on the 2.7-square-kilometre parcel of land on Hengqin Island adjacent o Macau, in which GEG is planning to invest RMB 10b ($1.6b).
