In a remarkable turnaround, Macau’s Galaxy Entertainment Group (GEG) has reported staggering year-on-year growth, with gross gaming revenues skyrocketing by 853% to HK$8.75 billion (US$1.12 billion) in the third quarter of 2023. This exceptional performance, fueled by robust mass gaming growth at the flagship property Galaxy Macau, underscores the recovery of Macau’s gaming industry and positions GEG as a key player in the region.
Mass Gaming Success:
Galaxy Macau played a pivotal role in GEG’s success, achieving mass gaming revenues that reached an impressive 121% of 2019 levels at HK$6.20 billion (US$794 million). This outperformance is particularly noteworthy when compared to the peninsula property StarWorld, where mass revenues reached just 71% of Q3 2019 levels. The success of Galaxy Macau reflects the resilience and attractiveness of GEG’s flagship property in the current market landscape.
Segment-wise Performance:
While VIP win at Galaxy Macau decreased slightly to HK$778 million (US$99.6 million) in Q3 from HK$931 million (US$119 million) in the previous quarter, electronic gaming win saw an 8.4% increase quarter-on-quarter, reaching HK$411 million (US$52.6 million). These figures highlight the balanced contribution from various gaming segments and the adaptability of GEG to evolving market dynamics.
Group-wide Financial Highlights:
GEG’s total net revenues for Q3 reached HK$9.65 billion (US$1.24 billion), a significant increase from HK$8.66 billion (US$1.11 billion) in Q2. The growth is attributed not only to gaming but also to the company’s diversified revenue streams, including HK$1.52 billion (US$195 million) from non-gaming contributions and HK$713 million (US$91.2 million) from the construction materials division.
Adjusted EBITDA rebounded impressively, reaching HK$2.77 billion (US$355 million), reversing a HK$581 million (US$74.4 million) loss from the same period a year earlier and marking an 11.9% increase quarter-on-quarter. This financial resilience demonstrates GEG’s effective management and strategic initiatives in a recovering market.
Chairman’s Perspective:
Dr. Lui Che Woo, Chairman of GEG, expressed his satisfaction with the ongoing recovery in both visitor arrivals and associated gaming revenue during Q3 2023. He highlighted the normalization of retail sales and mall rentals post-reopening, with Q3 mall rental across GEG’s portfolio reaching HK$379 million (US$48.5 million), equivalent to 114% of 2019 levels.
Future Developments:
Dr. Lui discussed the recent opening of Galaxy Macau Phase 3, featuring new hotels Raffles at Galaxy Macau and Andaz Macau. Additionally, he outlined the ongoing construction of Phase 4, a massive development spanning approximately 600,000 square meters, including high-end hotels, a 4,000-seat theater, extensive F&B, retail, non-gaming amenities, landscaping, and a water resort deck. Phase 4 is scheduled for completion in 2027, with Dr. Lui emphasizing the company’s commitment to adjusting development timelines based on market demand.
Galaxy Entertainment Group’s outstanding Q3 performance reflects the resilience and adaptability of the company in a recovering gaming industry. The robust growth in gross gaming revenues, balanced segment-wise contributions, and successful diversification into non-gaming revenue streams position GEG as a major player in Macau’s evolving landscape. As the company continues to invest in innovative developments, including the expansive Phase 4 project, the future looks promising for Galaxy Entertainment Group.