Galaxy Entertainment Profit Doubles as Macau Visitors Rise
Net income in 2012 rose to HK$7.4 billion ($953 million) from HK$3 billion a year earlier, the company said in a statement to the stock exchange today. That compares with the HK$7.46 billion average estimate of 25 analysts compiled by Bloomberg.
Galaxy, which runs the Galaxy Macau and StarWorld Hotel casinos in the former Portuguese colony, benefited as the world’s largest gambling hub attracted more Chinese tourists last year. Companies such as Galaxy, Sands China Ltd. (1928) and Melco Crown Entertainment Ltd. (MPEL) plan to expand in Macau’s Cotai area, a zone equivalent to Asia’s Las Vegas Strip, as casino revenue rose to a record 304 billion patacas ($38 billion) in 2012.
The company, based in Hong Kong, said in December it would invest as much as HK$50 billion to expand a Macau resort as it seeks to draw more Chinese visitors to its properties. Macau is the only place in China where casino gambling is legal.
The casino operator has received approval from the Macau government to add 50 tables between its Galaxy Macau and Starworld properties, Deputy Chairman Francis Lui said at a press conference today.
Shares of Galaxy fell 0.8 percent to close at HK$33.05. The benchmark Hang Seng Index gained 0.3 percent.
Adjusted earnings before interest, taxes, depreciation and amortization, or Ebitda, surged to HK$9.8 billion from HK$5.7 billion in 2011. Revenue rose 38 percent to HK$56.7 billion.
Still Macau’s gaming growth is slowing. Gross gambling revenue rose at about 9 percent in the first two months of this year, lagging behind the consensus 13 percent growth estimate for 2013, Jefferies Hong Kong Ltd. analysts led by Leon Liao wrote in a note this month. High-stakes bettors from the mainland are curbing spending after a slowdown in the world’s second-largest economy last year, according to Liao.
Lui said he hasn’t seen any evidence of a China government policy crackdown on the VIP junket operators who offer credit to gamblers from the mainland.
Macau’s government said last month it will “strengthen” its licensing system for casino junket operators and work with law enforcement to tackle gambling-related crimes.
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