Galaxy Entertainment Revenue Drops in Q2, Property Developments to Drive Future Growth

Galaxy Entertainment Group has reported a 5% decrease in year-on-year revenue ($1.68 billion) which was mostly caused by a significant gaming decrease. The company praises development works, however, and is hopeful that these will have a positive impact for the rest of the calendar year.

These property enhancements should “deliver future growth,” in the minds of their officials. The other potential factor in this could be the rise of Chinese tourism in their Macau-based venues.

Macau Enhancements

The first in line are flagship Galaxy and StarWorld Macau venues, whose development work is going to cost $1.5 billion…

…as the firm inches closer towards future integration and phases three and four connectivity. This enhancement will see 4,500 hotel rooms added, as well as a 400,000 square feet of MICE space, 500,000 square feet 16,000-seat arena, retail shops and casinos.

In order to go along with Macau’s high energy entertainment resorts, there are also plans to develop a Hengqin lifestyle resort while Japanese integrated resorts are also Galaxy’s ambition.

Japan is generally seen as a long-term opportunity for growth “that will complement Macau operations and other international expansion ambitions.”

Ensuring Competitiveness

Lui Che Woo, chairman, elaborates on future plans and how to offset somewhat poorer revenue performance:

“We have continued to make good progress with our previously announced $1.5bn property enhancement program. We believe these property enhancements will ensure the continuing attractiveness and competitive position of both Galaxy Macau and StarWorld Macau.

In the shorter term some customer disruption will occur but medium term the program will create shareholder value. Furthermore, we continue our construction works in Cotai phases three and four and review international expansion opportunities on a case by case basis.”

The Question of Japan and China

Woo went on to say that Japan’s continuation of relationship-building through things such as EuroJapan Cup sponsorship will remain a priority and that the JapanMacau integrated resort management mentorship scheme with Macau University and Toyo University…

…could be a gateway to a successful conclusion of IR saga.

“In the medium to longer term, we remain confident in the outlook for Macau due to the increasing wealth of the middle class in mainland China, that will in turn result in the growth of demand for tourism, leisure and travel,” he concluded.

The best part of total revenue for the company hails from Galaxy Macau property…

…although a four percent decline to $1.21 billion was reported. StarWorld Macau, however, dropped ten 10% to $356 million. The one venue that made a positive impact was Broadway Macau whose revenue rose to $18.7 million.

Source:

“Galaxy seeks solace in developments amid Q2 struggle”, casinobeats.com, August 13, 2019.