Galaxy Will Accelerate Casino Resort Project in Macau to Tap Gambling Boom

Galaxy Entertainment Group Ltd., the casino operator part-owned by Permira Advisers LLP, plans to invest an additional HK$800 million ($102.8 million) to speed up construction of a Macau casino resort to tap a gambling boom.

The money will be spent on raising the number of rooms ready when Galaxy Macau casino resort opens early next year by more than 50 percent to 1,400, Chairman Lui Che Woo said in Hong Kong today. The new commitment will bring the total investment to HK$14.9 billion, according to a statement.

“What we’ve seen from Okura, Banyan Tree and the market in general, there is a demand to fill: We have the opportunity to open the rooms sooner, we are moving ahead to do so.” Chief Operating Officer Michael Mecca said. Revenue may increase 40 percent in the second half, he said.

Sales rose 61 percent to HK$8.57 billion in the six months ended June 30, Galaxy said. Visitors from mainland China to Macau, the only city in the nation where casinos are legal, surged in the period. Gambling revenue in Macau climbed 67 percent in the first six months of the year to 86 billion patacas ($10.7 billion), the Gaming Inspection and Coordination Bureau said last month.

The casino operator said April 12 it received a six-year, HK$8.8 billion loan for building a resort in Macau from seven banks including Industrial & Commercial Bank of China Ltd. and HSBC Holdings Plc.

Lower Profit

First-half net income fell 55 percent to HK$475 million as the company lost money on bond buybacks, it said in a statement to Hong Kong’s stock exchange today. The company had a HK$133 million loss on bond buybacks compared with a HK$819 million gain last year, the casino operator said.

Galaxy dropped 3.2 percent to close at HK$6.00 in Hong Kong trading. The stock has gained 87 percent this year compared with a 6.1 percent decline by the benchmark Hang Seng Index.

First-half earnings before interest, taxes, depreciation and amortization rose 91 percent to HK$990 million, according to today’s statement

Tourist arrivals in Macau, the world’s biggest gambling hub, increased 18 percent in the first half, with visitor numbers from China surging 27 percent, according to government data.

The operator said it won’t pay an interim dividend.

To contact the reporter on this story: Wendy Leung in Hong Kong at wleung12@bloomberg.net

• Tweet
• More
  • Business Exchange
  • Buzz up!
  • Digg
• Print
• Email