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Galaxy Entertainment Group Reports Record 2012 Annual Results

        Galaxy Entertainment Group Reports Record 2012 Annual Results

GROUP ADJUSTED EBITDA UP 71% TO HK$9.8 BILLION FULL YEAR NET PROFIT
ATTRIBUTABLE TO SHAREHOLDERS INCREASED BY 146% FROM HK$3 BILLION TO HK$7.4
BILLION

PR Newswire

HONG KONG, March 26, 2013

HONG KONG, March 26, 2013 /PRNewswire-FirstCall/ --Galaxy Entertainment Group
Limited ("GEG" or the "Group") (HKEx stock code: 27) today reported results
for the three month and twelve month periods ended December 31, 2012.

FULL YEAR & Q4 2012 HIGHLIGHTS

GEG: Historic annual highs in revenue and earnings

  oFull year Group revenue increased by 38% to HK$56.7 billion
  oFull year Group Adjusted EBITDA of HK$9.8 billion, an increase of 71%
    (2011: HK$5.7 billion)
  oNet profit attributable to shareholders grew 146% to HK$7.4 billion
  oFourth quarter Group Adjusted EBITDA increased by 18% year-on-year to
    HK$2.5 billion

Galaxy Macau™: Continues to strengthen quarter by quarter

  oFull year revenue doubled to HK$33 billion, with Adjusted EBITDA up 152%
    year-on-year to HK$6.5 billion due to first full year of operation
  oFourth quarter revenue of HK$8.7 billion and Adjusted EBITDA of HK$1.9
    billion, up 15% and 52% year-on-year, respectively
  oAchieved the latest twelve months Return on Investment (ROI*) of 38%

Galaxy Macau™ Phases 2, 3 & 4: Exciting medium and long-term growth
opportunity

  oPhase 2 expected to complete in mid-2015 as the next major project to open
    in Macau
  oPhase 2 fit out enhancements and scope adjustments account for majority of
    budget increase from HK$16 billion to HK$19.6 billion
  oPlan to invest HK$50 - HK$60 billion in Phases 3 & 4 of Galaxy Macau™.
    Spanning 1 million square metres and targeting premium mass customers, we
    intend to submit plans this year with construction targeted to commence by
    the end of 2013 / early 2014

StarWorld: Full Year Adjusted EBITDA of HK$3.2 billion

  oFull year Adjusted EBITDA of HK$3.2 billion, an increase of 10%
    year-on-year
  oFourth quarter Adjusted EBITDA of HK$646 million, down 22% year-on-year
    reflecting lower VIP volumes and playing unlucky
  oImplementing new growth initiatives to ensure ongoing appeal, expect a
    majority to be completed in mid-2013
  oRecorded the latest twelve months ROI* of 94%

Balance Sheet: Exceptionally strong and liquid

  oCash on hand at December 31, 2012 of HK$15.6 billion
  oA net cash position of HK$4.6 billion where the gearing ratio reduced to
    zero from 19% in 2011

* ROI calculated based on the total Adjusted EBITDA for the latest twelve
months divided by gross book value through December 31, 2012 including
allocated land cost.

Dr. Lui Che-woo, Chairman of GEG said:

"Our performance in 2012 was noteworthy, with revenue and earnings hitting
historic highs once again. Driven by strong performances from Galaxy Macau™
and StarWorld, GEG's well-balanced portfolio of complementary properties is
now effectively catering to a broad customer base that is focused on tourism,
leisure and travel.

Our customer focused properties, coupled with our 'World Class, Asian Heart'
philosophy throughout GEG translated into another excellent full year set of
results, with revenue growing by 38% to almost HK$57 billion and Adjusted
EBITDA up 71% to just under HK$10 billion.

The year was defined by a continued shift in the market to the higher margin
mass segment and solid VIP revenues at both our properties. Galaxy Macau™ is
starting to fulfill its enormous potential and the Group is operating as
efficiently as it ever has. We are implementing new growth plans at StarWorld
and expect a majority to be completed in mid-2013.

GEG has a uniquely exciting plan for short, medium and long-term growth. Our
immediate priorities include optimising the performance of Galaxy Macau™ and
re-energising StarWorld's product and service experience. From the middle of
2015 onwards, we expect that Phase 2 of Galaxy Macau™ will attract a new
influx of customers drawn to its incredible array of leisure and tourism
amenities. Further out, we are confident that our revolutionary and
captivating plans for Phases 3 and 4 in Cotai, will not only set a new
benchmark for the global leisure and tourism industry, but will prove pivotal
in generating substantially higher returns for shareholders for many years to
come.

GEG remains fully committed to support the Macau government in leveraging on
its advantages to diversify Macau and enhance its position as a world class
tourism destination, and lay a solid foundation for Macau's future
development."

Market Overview

Macau has continued to establish itself as one of the world's premier tourism
destinations, enhancing its wide choice of hotel, dining and entertainment
options during the course of 2012.

Total gaming revenue for the year increased by 14% to HK$295 billion, with the
mass segment achieved the highest rate of growth at almost 33%. Total visitor
numbers rose marginally to almost 28.1 million, with visits from Mainland
China increasing at a faster rate. Mainland Chinese visitors now account for
more than 60% of total visitors (2011: 58%). Comparing the level of growth in
the mass segment against the increase in visitor numbers indicates that Macau
is succeeding in attracting tourism and leisure-travelers. GEG expects this
shift in the market to continue as a number of large scale infrastructure
projects in Macau and in Mainland China, such as the Guangzhou-Zhuhai
Intercity Mass Rapid Transit extension line and the Guangzhou-Zhuhai Super
Highway ending at Hengqin Island, the Hong Kong-Zhuhai-Macau Bridge and the
Light Rail Transit connecting Macau, Taipa and Cotai, are expected to be
completed in the next two to three years which will dramatically improve
access to Macau from Mainland China and connectivity within Macau. GEG's
existing offering of Galaxy Macau™ and StarWorld, combined with exciting
development plans for Phases 2, 3 & 4 on Cotai, leave it well placed to
benefit from Macau's deeper penetration into China.

Group Financial Results

Full year results were again excellent, with revenue increasing by 38% to
HK$56.7 billion, Group Adjusted EBITDA rising by 71% to HK$9.8 billion and net
profit attributable to shareholders growing 146% to HK$7.4 billion. This
tremendous growth was driven largely from the first full year contribution
from Galaxy Macau™, StarWorld also achieved 10% growth in earnings despite a
more challenging VIP gaming environment. The Construction Materials Division
and City Clubs business made solid Adjusted EBITDA contributions of HK$459
million and HK$163 million, respectively.

(Photo:http://www.prnasia.com/sa/2013/03/26/20130326153551139225.html )

Group Adjusted EBITDA in the fourth quarter was HK$2.5 billion, up 18%
year-on-year, and down 3.5% on the preceding quarter.

A key factor in the Group's improved earnings was the excellent performance of
the mass gaming segments at both of its flagship properties. Given the full
year operation, mass revenue at Galaxy Macau™ increased from HK$2.8 billion in
2011 to HK$7.3 billion in 2012, with StarWorld achieving growth of 47% to
HK$2.4 billion.

GEG's highly cash generative business model resulted in cash on hand more than
doubling to HK$15.6 billion (2011: HK$7.7 billion) as of December 31, 2012,
including restricted cash of HK$2.1 billion. The Group is in a net cash
position of HK$4.6 billion where the gearing ratio reduced to zero from 19% in
2011. This cash position provides the Group with an excellent foundation to
capitalise on future growth opportunities.

Galaxy Macau™

Galaxy Macau™ has become one of Macau's premier destinations, forging an
unequaled reputation for delivering exemplary service standards and a uniquely
Asian centric customer experience. Full year revenue amounted to HK$33 billion
and Adjusted EBITDA HK$6.5 billion, increased 102% and 152% respectively when
compared to the seven and a half months of operation in 2011. Adjusted EBITDA
margin improved from 16% to 20%. Fourth quarter Adjusted EBITDA reached HK$1.9
billion, an increase of 6% on the previous quarter. It represents Galaxy
Macau™'s sixth consecutive quarter of EBITDA growth. The latest twelve months
ROI climbed to 38%.

During the year Galaxy Macau™ outperformed the wider market in the mass
segment and improved its brand awareness. Additionally, the resorts already
compelling set of amenities were enhanced through the opening of two new
luxurious Sky Casinos, the Pavilion High Limit Slots, an additional VIP room
and the private members club China Rouge.

VIP Gaming Performance

Total VIP rolling chip volume for the year was HK$699 billion, which generated
revenue of HK$23.1 billion (2011: HK$12.2 billion). The opening of two new
Sky Casinos for Asia's most discerning customers contributed to our
performance. Underscoring the quality and appeal of the product, the
International Gaming Awards named Sky 32 Casino VIP Room of the Year.

VIP Gaming
HK$'m      Q1 2012 Q2 2012 Q3 2012 Q4 2012 FY 2011 FY 2012 YoY%
Turnover   171,393 186,442 173,295 167,590 379,671 698,720 84.0%
Net Win    5,120   6,287   5,720   5,956   12,193  23,083  89.3%
Win %      3.0%    3.4%    3.3%    3.6%    3.2%    3.3%    n/a



Mass Gaming Performance

Revenue in the mass segment was HK$7.3 billion (2011: HK$2.8 billion). Fourth
quarter revenue increased by 52% year-on-year to HK$2.1 billion.

Mass Gaming
HK$'m      Q1 2012 Q2 2012 Q3 2012 Q4 2012 FY 2011 FY 2012 YoY%
Table Drop 5,871   6,041   6,297   6,497   13,092  24,706  88.7%
Net Win    1,593   1,717   1,885   2,096   2,840   7,291   156.7%
Hold %     27.1%   28.4%   29.9%   32.3%   21.7%   29.5%   n/a

Electronic Gaming Performance

Revenue in the electronic gaming segment was HK$1.2 billion, up considerably
from HK$645 million in 2011.

Electronic Gaming
HK$'m        Q1 2012 Q2 2012 Q3 2012 Q4 2012 FY 2011 FY 2012 YoY%
Slots Handle 4,346   4,385   5,345   5,484   10,129  19,560  93.1%
Net Win      298     271     313     328     645     1,210   87.6%
Hold %       6.9%    6.2%    5.8%    6.0%    6.4%    6.2%    n/a

Non-Gaming Performance

Non-gaming revenues were HK$1.5 billion in the year. All areas performed well
as the property ramped up. Hotel occupancy on a combined basis at the resort's
three luxury hotels stood at 95% for the year.

Developing the Cotai landbank - Phase 2 and Phases 3 & 4

Building on the success of the existing integrated resort, GEG announced in
April 2012 the accelerated launch of Phase 2 of Galaxy Macau™. Encompassing
an area of half a million square metres and targeted to be completed in
mid-2015, it will take the total footprint of the property to one million
square metres. Key development highlights for Phases 1 and 2 combined include
more than 3,600 accommodations across five luxury hotels; two world class,
award-winning spas; the largest pan-Asian cuisine selection under one roof,
with approximately 100 restaurants, cafes, bars and lounges; nearly 200 luxury
retail outlets; and, meeting, events and banquet capacity for 3,000 guests.

Due to the enhanced fit out, scope adjustments and, to a lesser degree, cost
inflation, the budget for Phase 2 has increased from HK$16 billion to HK$19.6
billion. We are very confident that Phase 2 will be a spectacular addition to
Phase 1 and the Macau market.

The planning for the last two phases of GEG's landbank in Cotai is nearing
conclusion, with final plans expected to be submitted this year and
construction targeted to commence by the end of 2013 / early 2014. Expanding
the entire building area of GEG on Cotai to 2 million square metres, Phases 3
& 4 will significantly diversify GEG's product and service offering to include
a multitude of new cultural and entertainment elements predominantly targeting
premium mass guests. The ambitious HK$50- HK$60 billion project will
comprise:

  oApproximately 5,500 additional hotel rooms & suites
  oA state of the art multi-purpose 10,000 seat arena for world class
    entertainment and sporting events, as well as a 1,500 seat multi-purpose
    showroom
  oA 50,000 square metre convention centre with a capacity up to 5,000 guests
  oGaming capacity of up to 1,000 tables and 3,000 slots, representing
    approximately 5% of the total floor area

StarWorld Hotel & Casino

StarWorld achieved another solid full year performance. Adjusted EBITDA
increased by 10% to HK$3.2 billion and revenue was broadly in line with the
previous year at HK$21.5 billion. Adjusted EBITDA margin improved from 13% to
15% under HK GAAP. StarWorld remains one of the highest returning casinos in
the world, generating the latest twelve months ROI of 94% (2011: 86%). Fourth
quarter Adjusted EBITDA reduced year-on-year by 22% to HK$646 million,
reflecting softness in the wider VIP market and playing unlucky.

In order to ensure its continuing appeal, management is in the process of
implementing new growth initiatives to enhance the product and service
experience. A majority of these enhancements are expected to be completed in
mid-2013.

VIP Gaming Performance

VIP rolling chip volume for the year was HK$633 billion (2011: HK$664
billion), which generated revenue of HK$18.4 billion.

VIP Gaming
HK$'m      Q1 2012 Q2 2012 Q3 2012 Q4 2012 FY 2011 FY 2012 YoY%
Turnover   176,117 162,971 147,064 146,915 663,886 633,067 -4.6%
Net Win    4,754   5,115   4,416   4,098   20,252  18,383  -9.2%
Win %      2.7%    3.1%    3.0%    2.8%    3.1%    2.9%    n/a

Mass Gaming Performance

The mass segment was the property's star performer, delivering revenue growth
of 47% to HK$2.4 billion. Fourth quarter revenue improved to HK$706 million,
a quarter-on-quarter increase of 14%. Shared transport links with Galaxy
Macau™ continue to benefit both properties.

Mass Gaming
HK$'m      Q1 2012 Q2 2012 Q3 2012 Q4 2012 FY 2011 FY 2012 YoY%
Table Drop 2,392   2,374   2,627   2,585   8,616   9,978   15.8%
Net Win    564     545     618     706     1,661   2,433   46.5%
Hold %     23.2%   22.5%   23.1%   26.7%   18.9%   23.9%   n/a

Electronic Gaming Performance

StarWorld's electronic gaming generated revenue of HK$247 million, marginally
up on last year.

Electronic Gaming
HK$'m        Q1 2012 Q2 2012 Q3 2012 Q4 2012 FY 2011 FY 2012 YoY%
Slots Handle 927     835     882     901     4,025   3,545   -11.9%
Net Win      62      60      59      66      241     247     2.5%
Hold %       6.6%    7.2%    6.7%    7.3%    6.0%    7.0%    n/a

Non-Gaming Performance

Revenue increased by 20% to HK$416 million in 2012 compared to the previous
year. Room occupancy remained at near capacity throughout the year at 99%,
underlining StarWorld's status as one of Macau's premier 5 star luxury hotels.

City Clubs

City Clubs delivered a solid contribution generating HK$163 million of
Adjusted EBITDA to Group earnings.

Construction Materials Division

GEG's Construction Materials Division posted another solid set of results,
achieving year-on-year revenue growth of 30% to HK$2 billion and year-on-year
Adjusted EBITDA growth of 6% to HK$459 million.

Group Outlook for 2013

Despite a more challenging economic environment in 2012, the Group achieved
excellent performance, particularly in the mass segment. Looking to 2013, GEG
expects to see the VIP market gradually recover and believes that the shift to
the higher margin mass segment will gather momentum through 2013 and beyond,
particularly in light of key infrastructure developments such as the extension
of the high speed railway network in Mainland China, which will greatly
improve access to and from Macau. The Group is confident that its long-term
development plans for Phases 2, 3 & 4 of Cotai will create an unforgettable
customer experience that is aligned to the tastes and demands of this growing
influx of higher value middle class guests.

GEG will continue to drive the growth and synergies at Galaxy Macau™ and
StarWorld as well as pursue the next phases of its Cotai development plans.
The Group has total confidence that its plans for Phases 2, 3 & 4 will not
only transform its financial profile and create substantial value for
shareholders, but also elevate Macau's standing in the global tourism and
leisure community.

About Galaxy Entertainment Group Limited (HKEx stock code: 27)

Galaxy Entertainment Group Limited ("GEG") is one of Asia's leading gaming and
entertainment corporations. GEG develops and operates hotels, gaming and
integrated resort facilities in Macau. Through its subsidiary Galaxy Casino,
S.A., GEG holds a gaming concession in Macau, the only legal gaming location
in China and the fastest growing gaming market in the world.

The two flagship properties of GEG include Galaxy Macau™, a world class
integrated destination resort opened in May 2011 at Cotai, and StarWorld Hotel
and Casino, an award-winning property opened in 2006 on the Macau peninsula.

In April 2012, GEG announced the development of Galaxy Macau™ Phase 2 that
will nearly double the size of the existing resort to one million square
metres. Upon its completion in mid-2015, Galaxy Macau™ Phase 2 will bring to
Macau some of the most exciting and game-changing entertainment, leisure,
retail and MICE facilities. In December 2012, GEG outlined its concept plans
for Phases 3 & 4 of its Cotai landbank. We expect to commence construction by
the end of 2013 / early 2014 with a targeted opening between 2016 and 2018.
Predominantly targeting premium mass guests, it will provide an unparalleled
array of resort amenities and GEG expects it to set a new benchmark for the
industry and support the government in developing Macau into a world centre of
tourism and leisure.

Additionally, GEG operates City Clubs Casinos in Macau and a Construction
Materials Division.

For more information, please visit www.galaxyentertainment.com.

For Media Enquiries:

Galaxy Entertainment Group

Mr. Peter J. Caveny
Vice President, Investor Relations
Tel: +852-3150-1111
Email: ir@galaxyentertainment.com

Ms. Yoko Ku
Assistant Manager, Investor Relations
Tel: +852-3150-1111
Email: ir@galaxyentertainment.com

Ms. Kelrah Pang
Senior Manager, Investor Relations
Tel: +852-3150-1111
Email: ir@galaxyentertainment.com

SOURCE Galaxy Entertainment Group Limited

Website: http://www.galaxyentertainment.com
 
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