Galaxy Entertainment Q3 Revenue Down 29%

StarWorld Macau reported quarterly revenue of HK$2.9 billion, down 48% as compared to what was posted for the same period a year ago.

Premium mass is the industry term for high-stakes bettors who play with cash, while high rollers brought in by the so- called junket operators bet with credit provided by the middlemen.

Galaxy Entertainment Group (GEG) has reported a 29% year-on-year revenue decrease to $12.3bn for the three month period ended September 30.

In May, Galaxy Entertainment launched Phase 2 of the Galaxy Macau integrated resort. In the third-quarter, mass gaming accounted for 43% total gaming revenue, up from second-quarter’s 36% and first-quarter’s 29%.

“On the ground, we hear that the new premium mass area at Galaxy Macau has been performing well”, Credit Suisse AG analysts Kenneth Fong and Isis Wong wrote in a note on Monday. Supported by the new resorts, Galaxy’s quarter-on-quarter revenue climbed 5% and EBITDA rose 13%. Mass revenue fell 2 percent from a year earlier and rose 21 percent sequentially.

“Our efforts have resulted in increasing our mass, slots and non-gaming revenue mix from approximately one third of total revenue in the third quarter of 2014 to approximately one half in the third quarter of 2015”, the firm said.

“Spending behavior in Macau remains cautious, but we are very confident in the longer-term outlook and prospects for Macau and for [the group]”, Chairman Lui Che-woo said in a press release.

According to the Macau government, gaming revenue there contracted 33% on the year to 17.1 billion patacas ($2.1 billion) for September, for the 16th-straight month of decline.

Local media reported that China would implement supportive policies to improve Macau’s economy and analysts have been speculating it would be an increase of gaming tables.

A larger-than-expected number of visitors to Macau during China’s holiday-filled October 1-7 period has helped boost the share prices of other casino operators in recent days. On a sequential basis, the numbers were slightly better but still broadly negative, with the exception of a 12% rise in mass revenue.

Rivals Wynn Macau Ltd. and Sands China Ltd. are also scheduled to open new projects in 2016.