Galaxy first-half profit surges on new resort
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The planned Galaxy Macau expansion will add up to 500 gaming tables, luxury stores and 1,300 rooms from the JW Marriott and the Ritz-Carlton hotels.
The company opened the Galaxy Macau resort on the city’s Cotai strip in May last year. It plans to invest us$ 2 billion to almost double the size of that gambling center in the Chinese city to compete with rivals including Sands China, Wynn Macau and Melco Crown Entertainment First-half revenue doubled to us$ 3.64 billion.
“The profit jump was largely due to the contribution of Galaxy Macau,” said CFO Robert Drake in a telephone interview after the earnings announcement. “Our resorts will continue to ramp up.”
Galaxy shares fell 3.3 percent to us$ 2.80 in Hong Kong. The benchmark Hang Seng Index dropped 0.41 percent.
“Galaxy will be likely to see continuous improvement in the mass market business, benefiting from a ramp-up of its integrated resorts,” said Grant Govertsen, a Macau-based analyst at Union Gaming Research ahead of the earnings announcement.
Mass market revenue growth will outpace high-stakes gambling, or the VIP business, for the next two to three years, according to Govertsen. The slower Chinese economy will hurt VIP operations more than the mass market, he said. The planned Galaxy Macau expansion will add up to 500 gaming tables, luxury stores and 1,300 rooms from the JW Marriott and the Ritz-Carlton hotels.
Casino operators are expanding even as revenue growth slows in the Chinese city. Macau gambling revenue rose 1.5 percent to us$ 3 billion in July, the smallest gain since 2009, on easing demand and the effects of a typhoon. Chinese gross domestic product grew 7.6 percent in the second quarter, the slowest since 2009.