Galaxy profit jumps 56pc to $7.2b as VIP business booms
Casino resorts owner Galaxy Entertainment (0027) reported an interim net profit of HK$7.2 billion, up 56 percent on-year, driven by strong mass and VIP business.
Adjusted earnings before interest, taxes, depreciation and amortization grew by 34 percent to HK$8.6 billion
Net revenue climbed 22 percent to HK$13.9 billion.
The Hong Kong-based company also announced another special dividend of 50 HK cents per share payable on or about October 26.
Galaxy shares closed yesterday at HK$59.75, up 4.46 percent - the best performing blue chip. Both Galaxy's VIP and the mass market segment outperformed in the first half. VIP gross gaming revenues saw a 42.1 percent year on year increase to HK$19.53 billion, while mass gaming revenue grew 18.84 percent to HK$12.68 billion.
Adjusted EBITA rose 32 percent to a HK$4.3 billion.
For the second quarter, total mass table gross gaming revenues were HK$6.8 billion, up 20 percent year on year. Total VIP gross gaming revenues were HK$9.8 billion, up 38 percent.
JPMorgan and Credit Suisse said in reports that Galaxy Entertainment's performance in the second quarter was ahead of expectations and market forecast, retaining overweight and outperform ratings, respectively.
Deputy chairman Francis Lui Yiu-tung said that despite the Sino-US trade conflict and yuan's depreciation, he is optimistic about Galaxy's long-term prospects due to the strong spending power of the mainland middle class, and rising leisure and tourism demand.
Commenting on the project in the Philippines, which was stopped by the local government, Lui said that Boracay is an ideal place for investment. The company, he said, will support the Philippine government to replan the project to achieve a win-win situation. Only 50 or 60 gambling tables are planned at the resort.
Chairman Lui Che-woo said he remained confident in the outlook for Macau and the company, and looks forward to the opening of additional infrastructure projects such as the Hong Kong-Zhuhai-Macau Bridge, and the extended train line that will support the future growth of Macau and the integration of the Greater Bay Area.
When asked about retirement, Lui - who turned 89 today - said that he had worked hard all his life, and giving up his job seems to be a waste, so he has no intentions of retiring.