Galaxy Entertainment revenue plummets in Q3

Macau gaming operator Galaxy Entertainment Group’s revenue was down by more than 50% year-on-year in Q3 to HK$2.03bn, as gaming revenue collapsed to less than a tenth of pre-Covid levels.


Gaming revenue was HK$821m, which was down by 71.9% from the total recorded a year earlier. In addition, this figure was down 92.3% from the total recorded in Q3 of 2019, the last fourth quarter before the impact of Covid-19.

Non-gaming revenue from its resorts was much more resilient, but still down 28/0% to HK$438m.

Revenue at Galaxy Gaming’s construction materials division, less affected by Covid measures, increased slightly to HK$775m.

Casinos in Macau were closed for 12 days at the beginning of the quarter, as a lockdown was imposed across the Special Administrative Region due to a surge in Covid-19 cases.

“Moving onto our Q3 2022 performance, the elevated Covid-19 related travel restrictions imposed in Q2 flowed into Q3 and even resulted in the closure of casinos for 12 days during the quarter,” Galaxy chairman Lui Che Woo said. “This impacted visitation, revenue and profitability.”

Breaking revenue down by venue, the flagship Galaxy Macau resort brought in HK1.07bn, down 63.3%, of which HK$663m was from gaming.

StarWorld Macau’s revenue was HK$158m, with $139m from gaming. Both figures where less than a quarter of what was recorded a year earlier.

Broadway Macau, a “street entertainment and food resort”, brought in HK$10m.

The business reported negative adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of HK$581m. This compared with positive adjusted EBITDA of $503m a year earlier.

Normalising for win rates, the EBITDA loss was slightly lower, at HK$561m, but still a stark difference from the earnings-positive Q3 2021.

Galaxy Entertainment: Strong balance sheet

Despite the significant losses, Lui said that Galaxy Entertainment still remained in a strong cash position.

“As of 30 September 2022, cash and liquid investments were HK$22.5 billion and net cash was HK$19.3 billion,” he said. “Core debt remains relatively unchanged at HK$0.3 billion. This provides us with valuable flexibility in managing operations and supporting our ongoing development initiatives.”

This, he said, would help the business continue to develop its resorts.

During the quarter, Macau opened its tender process for six 10-year gaming concessions, replacing the current ones that expire at the end of the year.

All six current concessionaires or subconcessionaires - including Galaxy - applied for the new concessions. However, Genting also submitted an application, meaning that one of the seven applicants is set to miss out.

“We have submitted our Macau gaming concession tender which has been formally accepted as a valid tender by the Macau Government,” Lui said.