Macau gaming operator Galaxy Entertainment Group (GEG) has announced strong financial results for the first quarter of 2024, with gross gaming revenue (GGR) growing by 59 percent year-on-year, reaching HK$9.6 billion ($1.23 billion), a 4 percent increase compared to 4Q23.
In the last three months of the year, the company’s mass GGR increased by 57 percent to HK$7.7 billion ($1 billion). Electronic GGR was HK$600 million ($76.8 million), up 78 percent year-on-year and 18 percent quarter-on-quarter.
In 1Q24, Galaxy Entertainment posted net revenue of HK$10.6 billion ($1.36 billion), up 50 percent year-on-year. Adjusted EBITDA reached HK$2.8 billion ($358 million), up 49 percent from the same period of the previous year.
The company also notes that it ‘played lucky in its gaming operation’, which increased its Adjusted EBITDA by approximately HK$63 million ($8.1 million). Normalized Adjusted EBITDA was HK$2.8 billion ($358 million), up 50 percent year-on-year and down 5 percent quarter-on-quarter.
The group’s integrated resort – Galaxy Macau – continues to be the primary contributor to the company’s revenue and earnings. According to the same financial results, Galaxy Macau’s net revenue reached HK$8.3 billion ($1.06 billion), up 55 percent year-on-year. Adjusted EBITDA was HK$2.6 billion ($333 million), up 42 percent year-on-year, with an Adjusted EBITDA margin of 31 percent.
“Our balance sheet remained healthy and liquid.”
Lui Che Woo
In a statement from the chairman of GEG, Lui Che Woo mentions that the company made substantial adjustments to Galaxy Macau’s gaming floor in the first quarter, ‘in the shorter term, this was disruptive for the month of January and the early part of February’. ‘The renovation was completed just prior to Chinese New Year. With the completion of this renovation, we have seen a significant improvement in the flow of customer traffic across the entire floor.’
Meanwhile, Lui Che Woo affirms that Galaxy is in the process of implementing smart tables, which will drive further efficiency across the gaming floor. Additionally, the operator is also updating slot machine products and working on a range of upgrades to StarWorld Macau.
The chairman also showed his confidence in the company’s financial status, noting that ‘our balance sheet remained healthy and liquid.’
As of 1Q24, cash and liquid investments were HK$26.4 billion ($3.38 billion), and the net position was HK$25.0 billion ($3.2 billion) after debt of HK$1.4 billion ($179 million). Just to recall, Galaxy paid the previously announced special dividend of HK$0.30 per share on April 26th, 2024.
Pent-up demand from Mainland China
After China announced a visa scheme expansion for Chinese visitors, Galaxy Entertainment shares its view on the future, indicating that during 2024, Macau has continued to experience an ongoing recovery with both growth in visitor numbers and associated revenues. The recovery has been predominantly led by the premium segment. ‘We still see pent-up demand from the Mainland, particularly for tourism, leisure, and travel, and Macau remains one of the top choices for travel destinations by Mainland Chinese.’
The company also expects the continuous improvement of infrastructure will further boost Macau’s tourism, noting that ‘infrastructure to both access Macau and to move throughout Macau continues to improve. In February, the Jinhai Avenue Bridge and Zhuhai Urban-Airport Intercity Railway Phase 2 were officially opened. This is a new bridge that directly connects the Zhuhai airport to Hengqin Island and allows cars and trains to travel from the Zhuhai airport to Hengqin in about 15 minutes.’
‘The Zhuhai airport connects to 50 plus cities in China and will have a capacity of 27.5 million passengers when terminal 2 is completed this year. In comparison, the Macau airport connects to 48 cities in China and has a capacity of 10 million passengers. Within Macau, the fourth cross-harbor bridge is expected to open later this year and connects the peninsula to Cotai which will allow easier travel within Macau,’ it adds.
Overseas market
Galaxy Entertainment also updates that the company has opened overseas business development offices in Tokyo and Seoul and is soon to open an office in Bangkok.
‘This is in line with our commitment to the Government to further increase the number and flow of high-value international visitors to Macau.’
