Galaxy Entertainment Corp. released its latest financial report in a filing with the Hong Kong Stock Exchange and the gaming company is staying strong. Its profit for full-year 2018 increased 28.6% year-on-year to $1.72 billion, driven by a substantial increase in gaming revenue. The company’s overall revenue increased 13.5% over 2017, reaching $7.034 billion.
Galaxy Entertainment is behind, among others, the Galaxy Macau and Broadway in Macau. It also owns and operates a third venue in the city, the StarWorld Macau hotel casino, and holds the license for three “City Clubs” on the peninsula that are managed by third-party entities.
In a press release related to the financials, Galaxy’s chairman, Lui Che Woo, stated, “We continue to drive every segment of the business with a particular focus on the mass business and continue to allocate resources to their most efficient use.”
Galaxy has declared a special dividend as a result of last year’s performance. It will pay shareholders $0.057 per share, with the payout expected to be made April 26. That follows two other special dividends paid out over the past year – one for $0.052 and the other for $0.063.
EBITDA (earnings before interest, tax, depreciation and amortization) for 2018 jumped 19.2% year-on-year to around $2.148 billion. According to Lui, Galaxy was able to report an adjusted EBITDA increase “despite continuing competitive openings in both Macau and regionally and a number of geopolitical and economic issues that impacted consumer sentiments.” However, it added that “bad luck in its gaming operations” in 2018 forced the adjusted EBITDA down to around $61.66 million.
The performance led Union Gaming analyst Grant Govertsen to assert, “We are maintaining our Buy rating on shares of Galaxy, and view it as the best way to play Macau, particularly over the medium and longer terms. Our PT goes to $69 (+$12), based on a market-multiple of 12x and including valuation credit for future phases given some resumption of construction. While Galaxy has greater exposure to VIP than most (and therefore is not necessarily as defensive as SCL), we continue to view Galaxy as the best operator in the market today and expect the company to notably outperform in the event of a down market given a growing customer preference for Galaxy product/experience with all other things being equal.”
