Galaxy Entertainment Group (GEG) reported that its net revenue for the first quarter of 2023 was HKD7.05 billion ($900 million), up 142% from the last quarter of 2022 and also up from the HK$4.1 billion ($523.7 million) recorded the same period a year ago.
According to a filing with the Hong Kong stock exchange on Monday, the group's gross gaming revenue for the first three months was HKD6.07 billion ($775.3 million), up 79% year-on-year, and mass gross gaming revenue was HKD4.93 billion ($629.7 million), up 86% on a yearly basis. Adjusted EBITDA for the quarter was HKD1.91 billion ($243.9 million), reversing the negative figure of HKD163 million ($20.8 million) reported in Q4, 2022.
The upside came from strong opex control and solid mass performance, and the group’s flagship Galaxy Macau was "a standout performer" with a 61% recovery in EBITDA that helped it "retain the title of Macau’s most lucrative casino" in the first quarter of the year, J.P. Morgan analysts DS Kim and Mufan Shi noted in a Monday update, as per Macau Business.
The gaming operator also had ample liquidity, with cash and liquid investments of HKD28.7 billion and net cash of HKD21.3 billion as of the first quarter of this year.
"It has been very pleasing to see solid pent-up customer demand following the relaxation of travel restrictions. Visitor arrivals, hotel occupancy, gaming revenue, and retail sales have all seen good growth," said the Chairman of the company, Lui Che Woo, in the filing, as reported by the cited source.
Lui Che Woo
In the second quarter, the group expects to see “further improvements” as more facilities come online, including the Galaxy International Convention Center (GICC), Raffles at Galaxy Macau, and Andaz Macau.
"The reopening after Covid-19 and Phase 3 expansion will generate 900 new jobs for locals," the chairman stated.
The MICE facilities of the group’s Phase 3 project have been trial-running. The Galaxy Arena and GICC have hosted multiple shows and events. Meanwhile, the Raffles and Andaz hotels covered by the Phase 3 development are scheduled to open later this year, and the gaming operator is recruiting additional staff in preparation for the launch.
The 40,000 square meter convention center can accommodate up to 16,000 people; the Raffles Hotel features 450 suites, and the Andaz Hotel above the convention center has 700 rooms.
The group is also developing its Cotai Phase 4 project, which has a strong focus on non-gaming elements, primarily targeting MICE activities, entertainment, and family facilities while also including gaming.
"Galaxy remains a top pick in the sector due to an attractive product, net cash, and phase 3 opening, which will attract foot traffic given the new product with soft opening since April 2023," Lee said.
According to the latest stock filings from Galaxy's rivals, Sands China saw the biggest percentage gain in Q1 revenue in Macau. Net revenue rose 132 % year-over-year to $1.28 billion in the first quarter, about 55% of its pre-Covid-19 levels. MGM China reported a 131% year-over-year gain in net revenue to HK$4.84 billion ($618.2 million) in the first quarter.
Meanwhile, Melco International Development recorded a 51% year-on-year increase in first-quarter total operating revenue to $716.5 million; Wynn Macau's total operating revenue doubled to $600 million during the period; and SJM Holdings saw its net revenue increase 57.6% to HK$4 billion ($510.9) for the first three months of the year.
Macau's gaming revenue is tracking ahead of expectations, with consensus earnings continuing to be revised higher, Jefferies analyst Andrew Lee said in a report on Monday.
As reported last week, Macau casinos have seen MOP8 billion ($991.4M) in gross gaming revenue (GGR) during the first 14 days of May, an average daily run rate of MOP570 million ($7.06 million), as per investment bank JP Morgan.
Last month, the casino sector posted its best gaming month since January 2020, delivering GGR of MOP 14.7 billion ($1.81 billion), a 15.6% increase from the level seen in March. The April period included two days of the national Labor Day holiday that extended until May 3.
Gross gaming revenue in the city soared 450% year-over-year last month to smash the consensus estimate of analysts. However, it was still more than one-third below the 2019 level. Still, the start of the year has been strong for Macau.