Galaxy Macau plays lucky but Macau VIP drag hits GEG bottom line in 3Q19

Leading Macau IR operator Galaxy Entertainment Group reported a 10% decline in gross gaming revenue to HK$14.3 billion in 3Q19, the results boosted by good luck at flagship property Galaxy Macau and continued growth in the mass market segment.

Group-wide Adjusted EBITDA booked a 6% year-on-year increase to HK$4.1 billion (down 5% sequentially), with mass GGR up 11% year-on-year to HK$7.3 billion. VIP GGR fell 26% to HK$6.4 billion while slot machine revenue rose slightly to HK$641 million.

At Galaxy Macau, net revenue of HK$9.3 billion was flat year-on-year with Adjusted EBITDA rising 7% to HK$3.2 billion and Adjusted EBITDA margin of 34% compared with 32% in 3Q18.

The property saw its net gaming revenue fall only fractionally to HK$8.11 billion despite a 41.8% decline in rolling chip volume to HK$110.28 billion. Win rate in 3Q19 rose from 3.4% last year to 4.4% this time around, pushing VIP win to HK$4.81 billion.

Mas table drop at Galaxy Macau grew 4.3% to HK$18.40 billion with win of HK$5.13 billion while EGM coin-in was down but strong win saw win remain flat at HK$523 million.

On the peninsula, StarWorld Macau’s net revenue was HK$2.5 billion, down 14% year-on-year and 9% quarter-on-quarter, with Adjusted EBITDA falling 11% year-on-year to HK$828 million.

Rolling chip volume at StarWorld fell 32.2% for the quarter to HK$49.99 billion with win declining by a similar ratio to HK$1.39 billion. Mass table drop was very slightly down to HK$8.92 billion with win remaining flat at HK$1.69 billion. EGM win grew 34.1% to HK$55 million.

Broadway Macau, located adjacent to Galaxy Macau and offering mass gaming only, maintained steady net revenue of HK$141 million, although it played unlucky to see Adjusted EBITDA fall from HK$9 million in 3Q18 to HK$2 million. GGR remained flat at HK$73 million.

In a brief note discussing latest developments, Galaxy said it had recently completed the renovation of two VIP rooms which have been “well received by customers” as part of the company’s HK$1.5 billion property enhancement program at Galaxy Macau and StarWorld Macau. Galaxy added that the program, which includes preparation works for the effective future integration and connectivity of Phases 3 and 4 at Galaxy Macau, “continues on schedule and on budget.”

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