Macau casino operator Galaxy Entertainment's revenue jumps 72 per cent as tourists return, to create 900 jobs for locals

Galaxy Entertainment Group said it would create 900 new jobs for locals after the Macau casino operator recorded a 72 per cent jump in first-quarter revenue, following the city relaxing its Covid-19 restrictions and reopening its borders to tourists.

The casino firm, controlled by the family of Hong Kong property tycoon Lui Che-woo, reported revenue of HK$7.05 billion (US$901.8 million) in the first three months of 2023, compared with HK$4.1 billion a year ago, according to a filing with the Hong Kong stock exchange on Monday. Revenue was 142 per cent higher compared with the fourth quarter.

Galaxy Entertainment's adjusted earnings before interest, taxation, depreciation and amortisation (Ebitda) came in at HK$1.91 billion, up from HK$575 million a year earlier, and reversing a HK$163 million loss in the previous quarter.

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"It has been very pleasing to see solid pent-up customer demand following the relaxation of travel restrictions," chairman Lui said. "Visitors arrivals, hotel occupancy, gaming revenue and retail sales have all seen good growth."

Lui Che-woo, chairman and founder of Galaxy Entertainment Group. Photo: Bloomberg alt=Lui Che-woo, chairman and founder of Galaxy Entertainment Group. Photo: Bloomberg>

Macau began relaxing Covid-19 travel restrictions in early January in lockstep with mainland China and Hong Kong. Macau recorded nearly 5 million visitors in the first quarter of the year, more than double the 1.9 million in the same period in 2022. The numbers, however, are around 48 per cent of pre-pandemic levels of 10.4 million in 2019.

Lui said the opening of new amenities in phase 3 such as the Galaxy International Convention Centre, Raffles at Galaxy Macau and Andaz Macau in this quarter will improve the bottom line further.

The 40,000 square metre convention centre can accommodate up to 16,000 people, while the Raffles hotel features 450 suites and the Andaz hotel above the convention centre has 700 rooms.

"We would expect further improvements as more existing facilities come online following additional staff recruitment, expanded flight and ferry capacity," Lui said, adding "the reopening after Covid-19 and phase 3 expansion will generate 900 new jobs for locals".

Galaxy Entertainment's Macau rivals also received a shot in the arm from the tourism rebound, according to their exchange filings.

The Galaxy Hotel in Macau. Photo: Yik Yeung-man alt=The Galaxy Hotel in Macau. Photo: Yik Yeung-man>

Sands China saw the biggest percentage gain in revenue. Net revenue rose 132 per cent year on year to US$1.28 billion in the first quarter, about 55 per cent of its pre-Covid-19 levels.

MGM China reported a 131 per cent year-on-year gain in net revenue to HK$4.84 billion in the first quarter.

Melco International Development recorded a 51 per cent year-on-year increase in first-quarter total operating revenue to US$716.5 million.

Wynn Macau's total operating revenue doubled to US$600 million in the first quarter of 2023.

SJM Holdings saw its net revenue increase 57.6 per cent to HK$4 billion 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.

Weekly gross gaming revenue for the week ended May 14 was 500 million patacas (US$62 million) per day, versus 801 million patacas per day in 2019, according to Jefferies estimates.

"Galaxy remains top pick in the sector due to an attractive product, net cash and phase 3 opening, which will attract foot traffic given new product with soft opening since April 2023," Lee said.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2023 South China Morning Post Publishers Ltd. All rights reserved.

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