Galaxy Entertainment Group Record 2013 Annual Results

            Galaxy Entertainment Group Record 2013 Annual Results

Group Adjusted EBITDA up 28% to $12.6 Billion

Net Profit Attributable to Shareholders Increased by 36% to $10.1 Billion and
41% on an Adjusted Basis to $10.4 Billion

Strong Balance Sheet After Reducing Debt by 96%, Virtually Debt Free

Galaxy Macau™ Phase 2 Remains on Schedule and Budget to Complete as Macau's
Next Major Project

PR Newswire

HONG KONG, March 19, 2014

HONG KONG, March 19, 2014 /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 31 December 2013.


GEG: Record Highs in Revenue, Adjusted EBITDA and Net Profit Attributable to

  oFull year Group revenue increased by 16% to $66 billion
  oFull year Group Adjusted EBITDA of $12.6 billion, an increase of 28%
  oNet profit attributable to shareholders grew 36% to $10.1 billion and 41%
    on an adjusted basis to $10.4 billion
  oFourth quarter Group Adjusted EBITDA increased 41% year-on-year to $3.5

Galaxy Macau™: 10^th Consecutive Quarter of Adjusted EBITDA Growth

  oFull year revenue increased by 21% to $40 billion and Adjusted EBITDA grew
    by 36% to $8.8 billion
  oFourth quarter Adjusted EBITDA grew 35% year-on-year to $2.5 billion

StarWorld Macau: Best Ever Year and Quarter

  oFull year Adjusted EBITDA of $3.7 billion, an increase of almost 14%
  oFourth quarter Adjusted EBITDA of $1 billion, up 60%

Cotai and Hengqin Island: Exciting Medium and Long Term Development Plans

  oGalaxy Macau™ Phase 2 -- Remains on budget and on schedule to complete by
  oCotai Phases 3 & 4-- Finalising plans for a $50 - $60 billion resort
    focused on non-gaming with construction expected to begin as early as late
  oGrand Waldo Complex -- Refitting already commenced with expected unveiling
    of plans in mid-2014
  oHengqin Island -- Recently entered into a framework agreement with the
    Hengqin authority to move forward on the proposed RMB10 billion plan to
    develop a world class destination resort on a 2.7 sq km land parcel

Balance Sheet: Exceptionally Strong and Liquid; Virtually Debt Free

  oCash on hand at 31 December 2013 of $10.3 billion
  oNet cash position of $9.9 billion, with gearing at zero
  oBorrowings reduced by 96% year-on-year from $11 billion to $450 million

Dividend: Announce Special Dividend

  oDeclared special dividend of $0.70 per share to be paid on or about 31
    July 2014

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

"2013 was a success for the Group on every metric. Historic highs were
achieved in revenue and earnings as all parts of the business performed ahead
of last year. We strengthened our liquid balance sheet by reducing borrowings
considerably, completed the strategic acquisition of the Grand Waldo Complex,
and pressed on with our Cotai development plans that will provide guests with
the widest available choice of entertainment, cultural and MICE facilities in

"In 2013, revenue and earnings grew 16% and 36%, respectively. Galaxy Macau™'s
results continued to improve while growth initiatives implemented at StarWorld
Macau led to a strong resurgence.

"We have achieved a great deal since being awarded a gaming concession in
2002. The Galaxy brand has become synonymous with 'World Class, Asian Heart'
service and products standards. We have built and operated some of the largest
and most innovative leisure and entertainment properties in the world. And
finally, our phenomenal growth was recognised in June as we became a
constituent of Hong Kong's benchmark Hang Seng Index, a remarkable achievement
for such a young company.

"I am pleased to announce that GEG will pay a special dividend. We continually
evaluate our capital management strategy as we consider our robust development
plans. We have recently reinvested in the Group by repaying our debt as well
as generate significant cash flow from our operations and continue to invest
in our development pipeline. Further, we have confidence in the future of
Macau and believe that we have the capacity to also pay this special dividend.

"I am deeply excited by the journey ahead. We have an excellent development
pipeline including: completion of Phase 2 by mid-2015, commencement of Phases
3 & 4 as early as late 2014, the reintroduction of the Grand Waldo Complex and
the proposed future development of our Hengqin Island world class destination
resort to complement our projects in Macau. We are also exploring new
opportunities to expand our brand beyond Macau into overseas markets.

"Macau's prospects for the years to come are excellent. Major infrastructure
and transport projects will increase visitation and we are confident that the
Government's prudent stewardship of the economy will ensure long term
sustainability. Our  well defined roadmap for growth also gives us confidence
that we can fulfill our ultimate goal to be 'globally recognised as Asia's
leading gaming and entertainment corporation' and create substantial value for
shareholders for many years to come."

Market Overview

Macau continues to reinforce its reputation as one of the world's most dynamic
and vibrant tourism and leisure destinations. Total visitation climbed 4% to
29.3 million, with Mainland visits growing at a faster rate of 10% to 18.6
million. Visitors from the Mainland now account for 64% of the total.

Total gaming revenues increased by almost 19% to $350 billion, with the higher
margin mass segment growing 35% and VIP experiencing a very encouraging 13%
increase in revenue.

The evolution in the market to the mass segment reflects Chinese middle class'
increased desire for travel. Major infrastructure and transport improvement
projects in the region are well underway including 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. These works will
significantly improve Macau's access from the Mainland and boost visitation.
We strongly believe that Hengqin Island will also play a key role in
supporting Macau's development as a world centre of tourism and leisure.

Group Financial Results

Revenue, Adjusted EBITDA and net profit attributable to shareholders reached
all-time record highs. At $66 billion, total statutory revenue was up 16%
year-on-year, generating $12.6 billion of Adjusted EBITDA, an increase of 28%
on last year. Net profit attributable to shareholders grew 36% to $10.1
billion and 41% on an adjusted basis to $10.4 billion after accounting for
approximately $0.3 billion of costs associated with prepaying our bank loan.
The excellent results were largely due to Galaxy Macau™ maintaining its track
record of growing every quarter since it opened and growth initiatives
implemented at StarWorld Macau proving to be successful. City Clubs and the
Construction Materials Division made solid Adjusted EBITDA contributions of
$181 million and $488 million, respectively.

Group Adjusted EBITDA in the fourth quarter was $3.5 billion, up 41%
year-on-year, and up 10% sequentially.

A key contributing factor in the Group's earnings growth was the strong
performance in both the VIP and the mass segment. The Group's total gaming
revenue on a management basis grew 16% year-on-year to $65.4 billion in 2013
as total mass revenue increased 42% year-on-year to $16.8 billion and total
VIP revenue grew 9% year-on-year to $46.8 billion.

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GEG's highly cash generative business model resulted in cash on hand reaching
$10.3 billion as of 31 December 2013, including restricted cash of $0.4
billion. The Group has a net cash position of $9.9 billion and is virtually
debt free after reducing borrowings by 96% from $11 billion to $450 million
during the year, primarily through the repayment of the $6.9 billion club
loan, a $1.7 billion maturing RMB bond and a $1.6 billion back-to-back loan.
The Group has an excellent financial foundation to capitalise on future growth

Galaxy Macau™

Galaxy Macau™ performed exceptionally well in its second full year of
operation and concluded 2013 with its 10^th consecutive quarter of earnings
growth. In a relatively short time frame it has established itself as the must
visit resort in Macau.

Full year revenue amounted to $40 billion and Adjusted EBITDA $8.8 billion,
increases of 21% and 36% respectively on the prior year. Adjusted EBITDA
margin under HK GAAP improved from 20% to 22%, and from 28% to 31% under US
GAAP, due to continuously improving mass revenues and increased efficiencies.
Fourth quarter Adjusted EBITDA reached $2.5 billion, an increase of 35%
year-on-year and 9% on the preceding quarter. The latest twelve months ROI[1]
was 51%.

    ROI calculated based on the total Adjusted EBITDA for the latest twelve
[1] months divided by gross book value through 31 December 2013 including
    allocated land cost.

VIP Gaming Performance

Total VIP rolling chip volume for the year was $774 billion, generating
revenue of $26.5 billion (2012: $23.1 billion), an increase of 15%. The
property closed out the year with a strong fourth quarter with VIP net win up
37% year-on-year at $8.1 billion.

VIP Gaming
HK$'m    Q1 2013 Q2 2013 Q3 2013 Q4 2013 2012    2013    YoY%
Turnover 168,014 178,196 191,140 236,793 698,720 774,143 11%
Net Win  5,910   5,965   6,473   8,143   23,083  26,491  15%
Win %    3.5%    3.3%    3.4%    3.4%    3.3%    3.4%    n/a

Mass Gaming Performance

Revenue in the mass segment increased by 44% to $10.5 billion. Fourth quarter
revenue increased by 40% year-on-year to $2.9 billion.

Mass Gaming
HK$'m      Q1 2013 Q2 2013 Q3 2013 Q4 2013 2012   2013   YoY%
Table Drop 6,694   6,845   7,012   7,345   24,706 27,896 13%
Net Win    2,261   2,538   2,730   2,932   7,291  10,461 44%
Hold %     33.8%   37.1%   38.9%   39.9%   29.5%  37.5%  n/a

Electronic Gaming Performance

Electronic gaming revenue was $1.5 billion, up 25% year-on-year.

Electronic Gaming
HK$'m        Q1 2013 Q2 2013 Q3 2013 Q4 2013 2012   2013   YoY%
Slots Handle 6,187   7,781   8,375   7,708   19,560 30,051 54%
Net Win      359     383     402     371     1,210  1,515  25%
Hold %       5.8%    4.9%    4.8%    4.8%    6.2%   5.0%   n/a

Non-Gaming Performance

Non-gaming revenues were $1.5 billion for the year. Its award winning
restaurants, shops, hotels and spas and pools, continue to attract affluent
and sophisticated visitors seeking a more holistic family holiday experience.
Hotel occupancy on a combined basis at the resort's three luxury hotels stood
at 98% for the year.

Developing our Cotai landbank

Phases 2, 3 & 4

Building on the success of Phase 1, GEG is progressing well with its
construction of Phase 2 of Galaxy Macau™. Set to almost double the footprint
of the existing property, and due to complete by mid-2015 as Macau's next
major project, the Group is excited by its potential to capture a large amount
of new visitors to Macau.

Turning to the medium and longer term, our Phases 3 & 4 design plans on Cotai
are in the final stages and construction is expected to begin as early as late
2014. The $50-$60 billion project, which will increase GEG's total footprint
in Cotai to 2 million square metres, will employ the best hospitality
practices and standards from both the West and the East to deliver a "World
Class, Asian Heart" experience that will permeate every facet of the customer
experience. Comprising thousands of additional luxury hotel rooms, a state of
the art multi-purpose arena that will host world class entertainment and
sporting events, and a large convention centre, among other amenities, it will
set new standards for Macau and the global leisure industry.

Strategic Acquisition of the Grand Waldo Complex

On 17 July 2013, GEG purchased 100% of the properties of the Grand Waldo
Complex for a purchase price of $3.25 billion. Grand Waldo Complex is
strategically located adjacent to Galaxy Macau™ and will be complementary to
GEG's Cotai development with a focus on family customers. Refitting works are
already underway where we expect to unveil our plans in mid-2014.

StarWorld Macau

Full year revenue increased by 9% to $23.5 billion, and Adjusted EBITDA
improved 14% to $3.7 billion. Adjusted EBITDA margin under HK GAAP increased
slightly from 15% in 2012 to 16% in 2013, and stood at 25% under US GAAP
(2012: 25%). StarWorld Macau reported the latest twelve months ROI[2] of 105%.
Fourth quarter Adjusted EBITDA surpassed the $1 billion mark for the first

     ROI calculated based on the total Adjusted EBITDA for the latest twelve
[2] months divided by gross book value through 31 December 2013 including
     allocated land cost.

VIP Gaming Performance

VIP rolling chip volume for the year was $662 billion, which translated to
revenue of $19.1 billion. Fourth quarter VIP volume increased 24%
year-on-year to $181.5 billion and win increasing by 21% to nearly $5 billion.

Mass Gaming Performance

VIP Gaming
HK$'m    Q1 2013 Q2 2013 Q3 2013 Q4 2013 2012    2013    YoY%
Turnover 149,440 161,913 169,121 181,548 633,067 662,022 5%
Net Win  4,805   4,807   4,500   4,964   18,383  19,076  4%
Win %    3.2%    2.9%    2.7%    2.7%    2.9%    2.9%    n/a

Full year revenue grew to $3.9 billion, an increase of 59%. Fourth quarter
revenue increased by 69% year-on-year to $1.2 billion, an 18% rise

Electronic Gaming Performance

Mass Gaming
HK$'m      Q1 2013 Q2 2013 Q3 2013 Q4 2013 2012  2013   YoY%
Table Drop 2,664   2,663   2,829   2,935   9,978 11,091 11%
Net Win    802     856     1,012   1,193   2,433 3,863  59%
Hold %     29.6%   32.2%   35.4%   40.2%   23.9% 34.4%  n/a

Electronic gaming generated revenue of $209 million, down 15% on last year as
a result of slightly less volume and a lower win rate for the year.

Electronic Gaming
HK$'m        Q1 2013 Q2 2013 Q3 2013 Q4 2013 2012  2013  YoY%
Slots Handle 898     777     744     781     3,545 3,200 -10%
Net Win      64      48      44      53      247   209   -15%
Hold %       7.1%    6.1%    5.9%    6.8%    7.0%  6.5%  n/a

Non-Gaming Performance

Non-gaming revenue was $364 million (2012: $416 million). The decline was
primarily due to a change in accounting practices related to travel related
revenue plus the closure of a restaurant for refurbishment. Hotel occupancy
remained at near capacity throughout the year at 99%.

City Clubs

City Clubs contributed $181 million of Adjusted EBITDA to Group earnings, an
increase of 11% year-on-year.

Construction Materials Division

GEG's Construction Materials Division recorded a solid set of results in the
year, achieving revenue growth of 18% to $2.4 billion and Adjusted EBITDA
growth of 6% to $488 million.

Selected Major Awards for 2013

During 2013 GEG won over 50 major awards including some selected awards
highlighted below.

International Gaming Awards - Casino Operator of the Year Australia/Asia
The Hong Kong Institute of Financial Analysts and Professional Commentators
Limited -
Outstanding Listed Company Award
Asiamoney Magazine -
Overall Best Company in Hong Kong for Corporate Governance
Best for Shareholders' Rights and Equitable Treatment in Hong Kong
Best for Disclosure and Transparency in Hong Kong
FinanceAsia Magazine - Best Managed Company in Hong Kong
Forbes Magazine - Forbes Asia's Fabulous 50 Companies
China Hotel Starlight Awards - Top 10 Resort Hotels of China
Golden Horse Award of China Hotel - Most Charming Resort in Asia
International Hotel Awards - Best Resort Hotel Macau
Hurun Report - Best of the Best Awards - Luxury Hotel in Macau Star Performer
China Hotel Starlight Awards - Top 10 Glamorous Hotels of China
Golden Horse Award of China Hotel - Best Service Hotel
Travel Weekly Magazine and Events Magazine - China Travel and Meetings
Industry Awards -
Best Service Hotel of the Year
The Hong Kong Council of Social Service - 10 Consecutive Years Plus Caring
Company Logo
Business Environmental Council - HSBC Living Business 2013 - Long Term
Achievement Award
Labour Department / Occupational Safety & Health Council -
12th Hong Kong Occupational Safety &Health Award -- Best Safety Performance

Additional Update

Special Dividend

GEG declared a special dividend of $0.70 per share, payable to shareholders on
or about 31 July 2014.

After careful consideration, we believe that with our significant cash
generating capability, combined with our confidence in the outlook for the
future of Macau that we have the ability to continue with our development
pipeline, generate strong cash flow from operations, maintain a strong balance
sheet and return capital to shareholders through the payment of this special

Development in Hengqin Island

GEG recently entered into a framework agreement for a 2.7 square kilometre
land parcel to move forward with the proposed development of a world class
destination resort in Hengqin Island. The property includes approximately 2.5
kilometres of water front coastline. We plan to invest RMB10 billion in the
proposed resort that will complement GEG's business in Macau, significantly
differentiate us from our competitors and play a key role in supporting Macau
to become a world centre of tourism and leisure.

Group outlook for 2014

GEG continues to prove adept at improving its existing facilities and offers
to drive strong financial and operational gains. To achieve historic highs in
revenue and earnings at both of the flagship properties for the full year and
on a quarterly basis, and particularly at the more mature StarWorld Macau
business, demonstrates a deep understanding of the constantly evolving market
and customer preferences. In parallel, prudent financial management continues
to be a priority as illustrated by the decision to systematically reduce
borrowings over the year, leaving the Group virtually debt free as of today.
And this has been achieved despite investing in future growth projects such as
the development of Cotai Phases 2, 3 and 4, the strategic acquisition of the
Grand Waldo Complex, as well as the proposed expansion in Hengqin Island which
will be highly complementary to our Macau properties and support Macau in
developing into a world class tourism destination. We are also actively
exploring new opportunities to expand our successful brand into overseas
markets and create value for our stakeholders.

In the immediate future there is further scope to refine existing products,
launch new offerings, sharpen marketing initiatives and adjust the layout of
amenities at both of our flagship properties to maximise returns.

Further out, GEG's track record gives it confidence that it can execute its
three remaining Cotai development phases on schedule, and create innovative
propositions that will appeal to the middle class in China that aspire for
holiday experiences that transcend what is on offer today. With widespread
infrastructure and transport improvements set to transform access to Macau
from Mainland China in the coming years, GEG is arguably better positioned
than any other operator to attract the new wave of higher value visitors to
Macau and the surrounding region.

About Galaxy Entertainment Group (HKEx stock code: 27)

Galaxy Entertainment Group Limited ("GEG") is one of Asia's leading gaming and
entertainment corporations, and is a member of the Hang Seng Index.

GEG primarily develops and operates hotels, gaming and integrated resort
facilities in Macau, the only legal gaming location in China and the largest
gaming entertainment 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
Macau, 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 targeted completion by mid-2015, Galaxy Macau™ Phase 2 will
bring to Macau some of the most exciting entertainment, leisure, retail and
MICE facilities. In December 2012, GEG outlined its concept plans for Phases 3
& 4 of its Cotai landbank and expects to commence construction in 2014.

Additionally, GEG operates a Construction Materials Division.

For more information, please visit

For Media Enquiries:

Galaxy Entertainment Group
Mr. Peter J. Caveny                 Ms. Yoko Ku
Vice President, Investor Relations Manager, Investor Relations
Tel: +852 3150 1111                 Tel: +852 3150 1111
Email:   Email:

Full version of this press release can be accessed at:

SOURCE Galaxy Entertainment Group Limited

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