VIP segment weighs on Galaxy 19Q1 results

Galaxy Entertainment Group (GEG) saw its results weighed down by a challenging VIP segment in 19Q1, with the high-roller focused segment falling 25 percent year-on-year.

While the company posted stronger mass performance in the quarter, with total mass GGR rising 9 percent year-on-year to $7.3 billion, it also posted a 25 percent falling VIP GGR, down to $7.4 billion. Total electronic GGR was up slightly, to $606 million.

GEG chairman Lui Che Woo said a number of events impacted the market in 19Q1, most notably in the VIP segment, including the introduction of a full smoking ban and increased competition from local and regional casinos.

Net revenue reached $13 billion, down 8 percent year-on-year, while EBITDA was $4 billion, down 8 percent year-on-year as well – mostly in line with analyst expectations.

“We continue to progress with the previously announced $1.5 billion renovation enhancement program in both Galaxy Macau and StarWorld Macau. Whilst there has been some disruption, we believe this enhancement program will make our resorts even more attractive to guests. We anticipate completing this program in the early part of 2020,” added Lui.

Looking closer at the quarter, Lui noted a rise in visitor arrivals in 19Q1, up 21 percent year-on-year to 10.4 million, due mainly to the opening of the HZMB and the continued build-out of the High-Speed Rail Network.

“We continue with our development works for Phases 3 & 4, and with our planning for a lifestyle resort in Hengqin. We also continue with our efforts in Japan where we have submitted numerous Requests For Information to selected Japanese cities and prefectures,” he added.

Lui said he remains confident in the medium to longer term outlook for Macau given the continued growth in demand for tourism, leisure, and travel from Mainland China.