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Galaxy warns of ‘increasing regional competition’

Galaxy warned of “increasing competition from regional integrated resorts that are actively targeting the [mainland] Chinese market.”

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ARTICLE BY

PUBLISHED

UPDATED: 15 Jun 2024, 3:36 pm

Galaxy Entertainment Group (GEG) warned on Tuesday of “increasing competition from regional integrated resorts that are actively targeting the [mainland] Chinese market.”

The casino operator made the warning in a second-quarter earnings report to the Hong Kong Stock Exchange.

In the report, Galaxy said, “We do acknowledge that in the shorter term current international trade tensions may impact customer sentiment and spending habits.”

However, the company also said that it was “well positioned to capitalise on the future growth of Macau through our solid and healthy balance sheet that comfortably enables us to pay dividends, fund our development pipeline and pursue our international expansion ambitions.”

Galaxy announced a special dividend of HK$0.46 per share payable on or about October 25.

According to the report, Galaxy “remains confident in the medium-to-longer term outlook for Macau.” The company headed by Hong Kong mogul Lui Che-woo said its confidence was due to several factors including the developing potential of the mainland Chinese tourism market, Macau’s ongoing infrastructure development “that will allow easier access [to] and movement within Macau”, and the continuing growth of the mainland Chinese economy.

In the report’s outlook segment, Galaxy said that the growth in mainland China’s gross domestic product (GDP) would “result in growing demand for Macau’s leisure, tourism and travel” market.

The company, which owns six of Macau’s 41 casinos, also said it regarded “Japan as a great long-term growth opportunity that will complement our Macau operations and our international expansion ambitions.”

According to the report, Galaxy, in conjunction with Monte-Carlo SBM and its Japanese partners, looks forward to taking its brand to Japan.

Galaxy also said that it “continues to make progress with our concept plan for a lifestyle resort on Hengqin that will complement our high-energy resorts in Macau.”

According to the Macau Post Daily, the company also said that its ongoing Phase 3&4 development in Cotai would create about 4,500 guestrooms, around 37,000 square metres of MICE space, a 16,000-seat multi-purpose arena, restaurants, retail outlets, and casinos.

According to the report, the company is proceeding with a HK$1.5 billion “property enhancement” programme for Galaxy Macau in Cotai and StarWorld in Nape.

According to the report, the company’s second-quarter net revenue of HK$13.2 billion rose 1 per cent quarter-on-quarter but fell 5 per cent year-on-year. In the first six months of the year, net revenue fell 7 per cent year-on-year to HK$26.2 billion. Net profit attributable to shareholders (NPAS) in the first half dropped 7 per cent year-on-year to HK$6.7 billion.

UPDATED: 15 Jun 2024, 3:36 pm

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