Galaxy Entertainment Return Impressive First Quarter Figures

Dr Lui Che-woo Chairman of Galaxy at the IGA in London

Galaxy Entertainment Group (GEG) posted their first quarter of 2024 which saw GEG’s gross gaming revenue (GGR) rise by an impressive 59% year-on-year, reaching HK$9.6 billion ($1.23 billion). This figure represents a 4% increase compared to the previous quarter.

The mass market segment was a particular standout, with GGR increasing by 57% to HK$7.7 billion ($1 billion). This surge in mass market performance underscores the company’s ability to cater to the evolving preferences of its clientele, adapting its offerings to meet the growing demand for diversified entertainment experiences.

In addition to the mass market success, GEG’s electronic gaming revenue also saw a jump of 78% year-on-year increase, reaching HK$600 million ($76.8 million). The growth, coupled with an 18% quarter-on-quarter improvement, highlights the company’s strategic focus on embracing technological advancements and catering to the evolving preferences of its tech-savvy customers.

The strong operational performance was reflected in GEG’s financial results, with the company reporting a 50% year-on-year increase in net revenue, reaching HK$10.6 billion ($1.36 billion). This impressive growth was further underscored by a 49% surge in Adjusted EBITDA, which reached HK$2.8 billion ($358 million).

While the company’s “lucky” gaming operations contributed an additional HK$63 million ($8.1 million) to its Adjusted EBITDA, the normalized Adjusted EBITDA still demonstrated a robust 50% year-on-year increase, showcasing the underlying strength of GEG’s business model.

The group’s flagship integrated resort, Galaxy Macau, continued to be the primary driver of the company’s revenue and earnings. Its net revenue reached HK$8.3 billion ($1.06 billion), a 55% year-on-year increase, while Adjusted EBITDA grew by 42% to HK$2.6 billion ($333 million), with an impressive Adjusted EBITDA margin of 31%.

GEG’s financial position remains robust, with the company’s chairman, Lui Che Woo, emphasizing the company’s “healthy and liquid” balance sheet. As of the end of the first quarter, GEG had cash and liquid investments of HK$26.4 billion ($3.38 billion), with a net position of HK$25.0 billion ($3.2 billion) after accounting for debt of HK$1.4 billion ($179 million).

During the first quarter, GEG made substantial adjustments to the gaming floor at its flagship Galaxy Macau property. While this renovation was initially disruptive, particularly in the early part of the year, the company successfully completed the project just prior to the Chinese New Year celebrations. With the renovation now complete, GEG has witnessed a significant improvement in customer traffic across the entire gaming floor.

In addition to the gaming floor renovations, GEG is also in the process of implementing smart tables, which are expected to drive further efficiency across the gaming operations. Furthermore, the company is updating its slot machine products and working on a range of upgrades to its StarWorld Macau property.

GEG’s confidence in the future is palpable, as the company cites the ongoing recovery in Macau, driven by both growth in visitor numbers and associated revenues. This recovery has been predominantly led by the premium segment, with GEG citing “pent-up demand from the Mainland, particularly for tourism, leisure, and travel.”