Galaxy's new resort boosts H1 profit
Source: Bloomberg News |
August 28, 2012, Tuesday
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Print Edition
Print Edition
GALAXY Entertainment Group Ltd's first-half profit climbed ninefold after the Macau casino operator drew more Chinese mainland visitors to a gambling resort it set up last year.
Net income for the six months ended June rose to HK$3.45 billion (US$445 million) from HK$378 million a year earlier. Adjusted earnings before interest, taxes, depreciation and amortization, or Ebitda, surged to HK$4.7 billion from HK$1.8 billion for the six months.
The company opened the Galaxy Macau resort on the city's Cotai strip in May last year. It plans to invest HK$16 billion to almost double the size of that gambling center in the city to compete with rivals including Sands China Ltd, Wynn Macau Ltd and Melco Crown Entertainment Ltd. First-half revenue doubled to HK$28.3 billion.
"The profit jump was largely due to the contribution of Galaxy Macau," said Chief Financial Officer Robert Drake in a telephone interview after the earnings release. "Our resorts will continue to ramp up."
"Galaxy will be likely to see continuous improvement in the mass market business, benefiting from a ramp-up of its integrated resorts," said Grant Govertsen, a Macau-based analyst at Union Gaming Research ahead of the earnings release.
Mass market revenue growth will outpace high-stakes gambling, or the VIP business, for the next two to three years, according to Govertsen. The slower Chinese economy will hurt VIP operations more than the mass market, he said.
The planned Galaxy Macau expansion will add up to 500 gaming tables, luxury stores and 1,300 rooms from the JW Marriott and the Ritz-Carlton hotels.
Net income for the six months ended June rose to HK$3.45 billion (US$445 million) from HK$378 million a year earlier. Adjusted earnings before interest, taxes, depreciation and amortization, or Ebitda, surged to HK$4.7 billion from HK$1.8 billion for the six months.
The company opened the Galaxy Macau resort on the city's Cotai strip in May last year. It plans to invest HK$16 billion to almost double the size of that gambling center in the city to compete with rivals including Sands China Ltd, Wynn Macau Ltd and Melco Crown Entertainment Ltd. First-half revenue doubled to HK$28.3 billion.
"The profit jump was largely due to the contribution of Galaxy Macau," said Chief Financial Officer Robert Drake in a telephone interview after the earnings release. "Our resorts will continue to ramp up."
"Galaxy will be likely to see continuous improvement in the mass market business, benefiting from a ramp-up of its integrated resorts," said Grant Govertsen, a Macau-based analyst at Union Gaming Research ahead of the earnings release.
Mass market revenue growth will outpace high-stakes gambling, or the VIP business, for the next two to three years, according to Govertsen. The slower Chinese economy will hurt VIP operations more than the mass market, he said.
The planned Galaxy Macau expansion will add up to 500 gaming tables, luxury stores and 1,300 rooms from the JW Marriott and the Ritz-Carlton hotels.
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