Galaxy Entertainment reports H1 losses

The casino operator in May opened its $3.1 billion expansion of a resort and an adjacent revamped property, marking Macau’s first casino projects in three years. The combined earnings of the operators before interest, taxes, depreciation and amortisation dropped from $5 billion in the the first half of 2014, to just over $3 billion in the same period in 2015. In the second quarter alone, adjusted EBITDA for Galaxy Macau was reduced by approximately $300m, which GEG also put down to being “unlucky”.

A special dividend of HK$0.14 per share is scheduled to be paid on 30 of October, the Group announced.

Lui, chairman of Galaxy Entertainment Group Ltd. (00027.HK), said the industry hit bottom in June and the worst is behind it, the Hong Kong Economic Journal reports. Galaxy Entertainment’s total gaming revenue fell for 38% y-o-y to HK$11.2 billion, whereas the total VIP earnings noted a fall of 47% to HK$6.9 billion.

In spite of such a steep drop in terms of profits, the Chairman of Galaxy, Lui Che Woo, stressed that there are encouraging political signs concerning the Macau gaming market and that the properties that opened in May – Galaxy Macau Phase II and Broadway – are for the time being successful. The firm has already implemented a “salary freeze for all senior executives”. That compares with the HK$1.8 billion median estimate of five analysts compiled by Bloomberg.

Galaxy Entertainment described StarWorld’s performance as respectable given the current market conditions. “The continuous drop in gaming revenues should be nearly over”.

Mr Lui said the group’s management would continue to focus on driving efficiencies and exercising “rigorous cost controls”.

The Macau government might reconsider its position regarding a tabled ban on casino smoking lounges, depending on the results of an ongoing public consultation, Macau’s Secretary for Social Affairs and Culture, Alexis Tam Chong Weng, said earlier this month.

He said the recent devaluation of the renminbi added uncertainty to the industry.