Galaxy reports strong 2021 rebound
With a significant increase in revenue last year, Galaxy Entertainment Group’s (GEG) profit stood at HKD1.3 billion for 2021, compared to a HKD4 billion loss in 2020.
GEG recorded HKD19.7 billion in net revenue, an increase of 53% year-on-year, the firm announced yesterday.
Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) was HKD3.5 billion versus the HKD1 billion loss recorded in 2020, which included a one-off expense reversal benefit of HKD200 million in the fourth quarter of 2021.
According to GEG chairman Lui Che Woo, the group has continued to invest in the advancement of Macau’s economy. This includes the Cotai Phase 3 and 4 developments and the upgrading of existing resort facilities. The group plans to adapt its offerings at the upgraded resorts to the prevailing market conditions in this economically challenging period.
“We continue to pursue our project in Hengqin and are expanding our focus beyond Hengqin and Macau to potentially include opportunities within greater China, including the rapidly developing Greater Bay Area,” Lui added.
For two years now, Macau has been affected by the pandemic and associated travel restrictions, which led to a 2021 gross gaming revenue figure of HKD84.3 billion. Although the figure was 44% higher than the previous year, the increase was from a low base.
Galaxy’s total gross gaming revenue (GGR) on a management basis in 2021 was HKD17.3 billion, up 51% year-on-year. Mass GGR was HKD11.2 billion, up 83% year-on-year. VIP GGR was HKD5.5 billion, up 11% year-on-year, while electronic GGR was HKD642 million, up 35% year-on-year.
Reflecting on performance during the recent Chinese New Year holiday, Lui also conceded that visitor arrivals were lower than anticipated due to travel restrictions.
However, “gaming revenue was solid, driven by premium mass; hotel occupancy was higher and retail sales were strong. This is evidence of strong pent-up demand for tourism and leisure in Macau,” he said.
Bernstein Research has previously forecast that GGR for February will likely be up 29% from January, which recorded a figure of MOP6.34 billion.
According to the brokerage firm, average daily revenue from February 1 to 6 stood at MOP333 million compared to MOP205 million in January.
Analysts at J.P. Morgan have also confirmed that GGR was likely over MOP300 million per day during the Chinese New Year, a significant recovery when compared to pre-pandemic figures during the same long-holiday (MOP500 million).
Lui added that the group’s balance sheet also remains healthy and the group is well-positioned to navigate the pandemic.
The gaming operator also announced a dividend of HKD0.30 per share to be paid on or around April 29, 2022.
Galaxy scraps relationships with junkets
Galaxy Entertainment Group confirmed yesterday that it no longer has any agreements with junket operators.
Speaking during the announcement of the gaming operator’s 2021 earnings, the GEG executive director Francis Liu said, “as for VIP lounges and junket operators: I think this is an issue of grave concern for everyone, but I can tell you that our group no longer has any junket operations.”
It was also revealed in the announcement that during the fourth quarter of last year, in line with the broad range of changes in the regulatory environment, the group suspended VIP gaming operations, pledging that they will continue to monitor the situation.
Other gaming operators including Wynn Macau, Sands China and Melco Resorts have confirmed that their agreements with gaming promoters have also ended.
This comes after the high-profile arrets of junket moguls Alvin Chau and Levo Chan amid expanded crackdowns on cross-border financial transactions due to gambling.
