Galaxy Entertainment Group (GEG) has emerged as a frontrunner in Macau’s gaming industry, showcasing a stellar performance in the fiscal year 2023. With a surge in net revenues, gross gaming revenue (GGR), and adjusted EBITDA, GEG’s resilience amidst the challenges posed by the COVID-19 pandemic underscores its robust business strategy and commitment to growth.
Financial Overview
In the three months ending 31 December 2023, GEG reported a remarkable year-on-year increase in net revenues, soaring by 254% to HK$10.3 billion (US$1.32 billion). This surge was complemented by a sequential growth of 7%, signifying a steady rebound from the pandemic-induced downturn. The gross gaming revenue for the same period reached HK$9.24 billion (US$1.18 billion), marking an impressive 6% increase compared to the previous quarter.
Furthermore, GEG’s adjusted EBITDA witnessed a significant turnaround, standing at HK$2.8 billion (US$358 million) and reversing a loss of HK$163 million (US$20.8 million) in the fourth quarter of 2022. Despite encountering a stroke of bad luck amounting to HK$103 million (US$13.2 million), GEG’s resilience shone through, reflecting its robust operational efficiency.
Segment
Breaking down the performance by segment, GEG showcased notable improvements across various fronts. Rolling chip volume saw a 6.6% increase quarter-on-quarter, reaching HK$34.6 billion (US$4.42 billion) with a win of HK$909 million (US$116 million). Mass table drop also witnessed a growth of 2.6% to HK$30.7 billion (US$3.92 billion), accompanied by a win of HK$7.83 billion (US$1.0 billion). Additionally, electronic gaming volume surged by 14.6% to HK$16.4 billion (US$2.10 billion) with a win of HK$508 million (US$64.9 million).
FY23 Performance
For the fiscal year 2023, GEG reported a staggering 211% year-on-year increase in net revenues, amounting to HK$35.7 billion (US$4.56 billion), with GGR soaring by 322% to HK$31.7 billion (US$4.10 billion). This phenomenal growth trajectory underscores GEG’s resilience and adaptability in navigating the volatile market conditions.
Moreover, GEG’s adjusted EBITDA for FY23 stood at HK$9.96 billion (US$1.27 billion), a stark reversal from the previous year’s loss of HK$553 million (US$70.7 million). This turnaround reflects the efficacy of GEG’s strategic initiatives and operational resilience in driving sustainable growth.
1Q24 Performance and Outlook
Offering insights into its performance for the first quarter of 2024, GEG highlighted promising indicators. With nearly 100% occupancy across its 5,000 hotel rooms, GEG continues to capitalize on the resurgence of tourism. During the recent Chinese New Year holiday period, mass gaming drop and revenues surged, reaching 120% of 2019 levels, indicating a robust recovery trajectory.
Strategic Initiatives and Future Prospects
Dr. Lui Che Woo, Chairman of GEG, emphasized the company’s unwavering commitment to driving every segment of the business, particularly focusing on the mass business. GEG’s decision to allocate resources efficiently underscores its strategic foresight and commitment to maximizing shareholder value.
In a significant move, GEG announced a special dividend of HK$0.30 per share, scheduled for 26 April, making it the first Macau concessionaire to resume dividends post-border reopening. This decision underscores GEG’s confidence in the long-term outlook of Macau and the company’s ability to generate sustainable returns for its shareholders.
With a solid balance sheet boasting HK$23.5 billion in net cash and robust cash flow from operations, GEG is well-positioned to fund its development pipeline and pursue international expansion ambitions. This strategic foresight and financial prudence reinforce GEG’s position as a market leader in the gaming and hospitality sector.
Galaxy Entertainment Group’s exceptional performance in FY23 reflects its resilience, adaptability, and strategic foresight in navigating the challenges posed by the COVID-19 pandemic. With robust financials, promising performance indicators for 1Q24, and a strategic focus on driving sustainable growth, GEG continues to reinforce its position as a frontrunner in Macau’s gaming industry. As it embarks on its journey of international expansion, GEG remains committed to delivering value to its stakeholders while contributing to the economic prosperity of the regions it operates in.