CASINO

Galaxy beats income estimates to deliver over $300M first-half profit

TAGs: Galaxy Entertainment Group, Jasmine Solana, Macau

Macau casino operator Galaxy Entertainment Group (GEG) continues its winning streak in the first half of 2016.

Galaxy beats income estimates to deliver over $300M first-half profitIn a filing with the Hong Kong Stock Exchange, GEG reported that its first-half net profit reached HK$2.6 billion ($335.31 million), a 26 percent increase compared to the same period last year. Group revenue also rose by 1 percent, but a 15 percent decline in revenue from VIP visitors has dulled gains from mass market visitors.

Total revenue in the first six months reached HK$25.5 billion, a small increase compared to the HK$25.4 billion year-on-year.

GEG’s other properties, StarWorld Macau continues to suffer from its ongoing transition to a more mass-centric business, as first-half revenue dropped 22 percent year-on-year to HK$5.6 billion. Broadway Macau, on the other hand, played lucky in second quarter, which increased adjusted EBITDA by about HK$2 million. GEG said hotel occupancy at Broadway Macau, which has no VIP facilities, was “virtually 100 percent.”

Just like the five other listed casino operators in Macau, Galaxy has been hit by the declining demand from Chinese high rollers following Beijing’s crackdown on corruption. Still, the casino operator is optimistic that the special administrative region has already turned a corner.

“The first half of 2016 was encouraging for Macau and we continued to see gradual signs of stabilization, as it diversifies, and the shift towards mass segment continues,” Galaxy said in a statement. “While we do acknowledge that there might be increased competition with the opening of additional properties in Cotai, we are hopeful that the new properties will also be a catalyst for increased visitation.”

Galaxy occupies the biggest plot on Macau’s Cotai strip, where Wynn Macau recently opened the $4 billion Wynn Palace resort. Las Vegas Sands boss Sheldon Adelson is also scheduled to open his $3 billion Parisian property on the strip on Sept. 13 via local subsidiary Sands China.

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