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Macau franchisee Galaxy Entertainment Group returns to profitability in the first quarter of 2023 with adjusted EBITDA of HK$1.91 billion (US$244 million), up from HK$600 million (US$77 million) and HK$200 million (US$26 million) a year earlier. ) loss for the December 2022 quarter.
Results improved sharply, handily beating market expectations of HK$1.7 billion (US$217 million), following Macau’s reopening of its borders on Jan. 8 and the rapid return of customers in the months since. As a result, net revenue for the group as a whole rose 72% year-on-year and 142% quarter-on-quarter to HK$7.05 billion (US$902 million), with gross gaming revenue of HK$6.07 billion (US$776 million). Mass win accounted for the bulk of total gaming revenue at HK$4.94 billion (US$632 million), VIP win at HK$794 million (US$102 million) and slot machine win at HK$337 million (US$43 million).
Non-gaming business contributed HK$1.03 billion (US$132 million) in revenue, up 66% year-on-year and 105% quarter-on-quarter, while GEG’s building materials division added another HK$698 million (US$89 million).
By property, Galaxy Macau’s gross gaming revenue was HK$5.06 billion (US$647 million), up 79% from a year earlier, with adjusted EBITDA of HK$1.85 billion (US$237 million). StarWorld’s gross gaming revenue was HK$958 million (US$123 million), up 128% year-on-year and 298% quarter-on-quarter, bringing the property’s adjusted EBITDA profit back to HK$216 million (US$28 million).
Broadway Macau posted an adjusted EBITDA loss of HK$10 million (US$1.3 million) on net revenue of HK$18 million (US$2.3 million), while City Clubs had an adjusted EBITDA of HK$3 million (US$384,000), a loss on net income compared to 2022 It climbed 550 percent to HK$52 million ($6.6 million) in the first quarter of 2019.
In an investor note released shortly after GEG’s results on Monday morning, Jefferies analyst Andrew Lee noted that the company was constrained by labor issues in the March quarter, but said GEG “remains the top pick for the sector.” , due to attractive product, net cash and (Galaxy Macau) Phase III Openingwhich will attract foot traffic considering the new products that will be in trial operation from April 2023.
“Furthermore, the company noted that only ‘more than 60% of hotel rooms are available for guests’ in 1Q23 negatively impacted by staff restrictions, but currently its hotels are fully staffed, with the exception of the Broadway Hotel.”
Commenting on the current outlook following the easing of border restrictions, GEG said: “We are now firmly focused on developing [Galaxy Macau] Phase four is already underway. We see the premium segment growing as this segment prefers higher quality and more spacious rooms.
“We continue to move forward with the construction of Cotai Phase 4, our next-generation integrated resort, which will complete our ecosystem in Cotai. Phase 4 will include entertainment, retail, dining, gaming and multiple hotels. Upon completion, our Macau The total hotel capacity will be approximately 7,500 rooms and suites.
“As you can see, we are confident in the future of Macau, and Cotai Phases 3 and 4 will support Macau’s vision to become a world center of tourism and leisure.”
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