Macau casino operator Galaxy Entertainment Group saw first quarter revenue increase 5 percent year-on-year to $14.1 billion, according to the company’s filing to the Hong Kong Stock Exchange on Thursday.
Q1 group adjusted EBITDA increased 31 percent year-on-year to $3.2 billion, up 7 percent quarter-on-quarter, higher than anlayst expectations. Adjusted EBITDA over the last 12 months was up 25 percent year-on-year to $11.1 billion.
Bernstein said the higher-than-expected results were “largely due to stronger than anticipated Mass and cost savings.”
Hotel occupancy over the group’s seven hotels was 97 percent, the company noted.
“We are pleased to see that Macau is transitioning to a sustainable market recovery lead by mass,” said GEG chairman Dr. Lui Che Woo.
“The continuing growth in the emerging middle-class in the Mainland and their appetite for leisure, tourism and travel gives us continued confidence in the longer term outlook for Macau,” he said.
Galaxy Macau was the primary contributor to the group’s revenue and earnings, clearing revenue of $10.2 billion, up 5 percent year-on-year. Adjusted EBITDA was $2.6 billion, an increase of 27 percent year-on-year.
The company reported strong growth in mass gaming performance at its Galaxy Macau property, up 21 percent year-on-year to $4 billion.
Electronic gaming revenue in 17Q1 grew 19 percent year-on-year to $454 million.
Total VIP rolling chip grew only marginally to $131.8 billion, up 1 percent year-on-year. This translated to VIP revenue of $5.1 billion, down 6 percent year-on-year.
“We are delighted that Galaxy, traditionally a stronger player in the VIP segment, did not chase the lower-margin and potentially unsustainable VIP business despite the rebound in VIP revenue,” noted Chelsey Tam, from Morningstar. “VIP revenue was… substantially worse than the estimated Macau VIP market year-over-year growth of 13 percent, due to the casino playing less luckily, new casinos openings in the second half of last year, and right-sizing of VIP tables.”
“We expect continued mass market and slots outperformance for the company, along with modest VIP growth,” said Union Gaming analysts in a note on Thursday.
The company also operates StarWorld Macau and Broadway Macau. The company added it will “soon commence construction on Cotai – The Next Chapter, which will include hotel, MICE, entertainment and gaming.”