Galaxy reports solid Q1 results

Galaxy Entertainment Group (GEG) reported robust first-quarter results earlier this week, driven by a rebound in the local gaming sector and increased visitor arrivals.

The casino operator’s revenue rose to HKD11.2 billion ($1.44 billion), up from HKD10.55 billion in the same period last year. Adjusted EBITDA climbed 16% year-over-year to HKD3.3 billion, reflecting improved operational efficiency and solid earnings growth in conjunction with favorable market conditions.

“We were satisfied with our casinos’ performance over the Chinese New Year and, in particular, the post-Chinese New Year period, which experienced a longer tail than previously,” said GEG Chairman Francis Lui.

Galaxy Macau, the group’s flagship property, led gains with 99% hotel occupancy and a 10% revenue increase year-over-year. In contrast, StarWorld Macau saw a 9% revenue decline and a 20% drop in EBITDA due to weaker gaming results despite full occupancy.

GEG states that it is continually pursuing expansion opportunities on a case-by-case basis, in the Greater Bay Area (GBA) and select overseas markets, including Thailand.

The company is also progressing with its Galaxy Macau Phase 4 expansion, expected in 2027. Phase 4 will add 1,600 premium rooms targeting the lucrative mass market segment. The company also acknowledged the recent comments by the Chief Executive that the 2025 gross gaming revenue (GGR) target may be challenging to achieve.

At the first day of the G2E Asia Conference, Lui highlighted Macau’s limited hotel capacity as a potential barrier to competitiveness amid rising demand, comparing Macau’s nearly 44,000 rooms to Las Vegas’ 155,000 rooms serving 42 million visitors annually. He urged the industry to focus on quality and customer experience rather than price competition.

As of March 2025, the city has 147 accommodation establishments, six more than the previous year. However, according to government data, the number of available rooms decreased by 5.8% year-on-year to 43,900, down from 46,600 in 2024.

A key driver of GEG’s strong performance has been its emphasis on diverse non-gaming amenities.

The company’s diverse portfolio of hotel brands, retail outlets, dining options, the Grand Resort Deck, MICE (meetings, incentives, conferences, and exhibitions) facilities, and the Galaxy Arena are major attractions. Entertainment and events played a crucial role in drawing both new and returning visitors.

In the first quarter alone, GEG hosted major concerts, including Jeff Chang’s World Tour, K-pop star Taeyang’s solo tour, Blackpink’s Jisoo solo Asia Fan Tour, and Andrea Bocelli. These offerings contributed to a 64% year-on-year increase in foot traffic at Galaxy Macau.

“During the quarter, we continued to drive every segment of the business, in particular premium mass, through our unparalleled products and service, ongoing property enhancements, diverse entertainment shows and events, as well as the full implementation of smart tables, among others,” said Lui.

“During March, we made a few adjustments to Galaxy Macau’s main gaming floor, adding new electronic games, which was partially disruptive for the month.”

GEG’s balance sheet remains strong with HKD33 billion in cash and liquid investments and net debt of HKD4 billion, supporting ongoing investments and dividend payments. The company declared a final dividend of HKD0.50 per share payable in June.

In recent developments, GEG soft-launched Capella ahead of the Golden Week holiday – the 10th hotel brand in GEG’s portfolio.

Capella positions itself as an ultra-luxury all-suite hotel. Moreover, Galaxy Macau Phase 4 remains on track for a 2027 launch. The Phase 4 Cotai development is a 600,000-square-meter integrated resort project featuring new luxury hotels, a 5,000-seat theater, and expanded non-gaming amenities. “We will continue to drive every segment of the business,” said Lui.

Shares responded positively, rising 1.2% to HKD 30.55 following the earnings release.

Nadia Shaw