GALAXY ENTERTAINMENT GROUP SELECTED UNAUDITED Q3 2019 FINANCIAL DATA
Tokyo, 7 November 2019 – Galaxy Entertainment Group (“GEG”, “Company” or the “Group”) (HKEx stock code: 27) today reported selected unaudited financial data for the three months period ended 30 September 2019. (All amounts are expressed in HKD unless otherwise stated)
Q3 2019 RESULTS HIGHLIGHTS
GEG: Solid Mass Performance, Challenging VIP and Record Non-Gaming Revenue
- Q3 Group Net Revenue of $12.7 billion, down 2% year-on-year and down 4% quarter-on-quarter
- Q3 Group Adjusted EBITDA of $4.1 billion, up 6% year-on-year, down 5% quarter-on-quarter
- Played lucky in Q3 which increased Adjusted EBITDA by approximately $184 million, normalized Q3 Adjusted EBITDA of $3.9 billion, down 7% year-on-year and down 1% quarter-on-quarter
- Latest twelve months Adjusted EBITDA of $16.8 billion, up 1% year-on-year, up 1% quarter-on-quarter
Galaxy MacauTM: Solid Mass Performance, Property Enhancement Program on Track
- Q3 Net Revenue of $9.3 billion, flat year-on-year and down 2% quarter-on-quarter
- Q3 Adjusted EBITDA of $3.2 billion, up 7% year-on-year, down 2% quarter-on-quarter
- Played lucky in Q3 which increased Adjusted EBITDA by approximately $171 million, normalized Q3 Adjusted EBITDA of $3.0 billion, down 9% year-on-year and up 1% quarter-on-quarter
- Hotel occupancy for Q3 across the five hotels was virtually 100%
StarWorld Macau: Solid Mass Performance, Property Enhancement Program on Track
- Q3 Net Revenue of $2.5 billion, down 14% year-on-year and down 9% quarter-on-quarter
- Q3 Adjusted EBITDA of $828 million, down 11% year-on-year, down 12% quarter-on-quarter
- Played lucky in Q3 which increased Adjusted EBITDA by approximately $15 million, normalized Q3 Adjusted EBITDA of $813 million, down 13% year-on-year and down 4% quarter-on-quarter
- Hotel occupancy for Q3 was virtually 100%
Broadway Macau™: A Unique Family Friendly Resort, Strongly Supported By Macau SMEs
- Q3 Net Revenue of $141 million, versus $145 million in Q3 2018 and $147 million in Q2 2019
- Q3 Adjusted EBITDA was $2 million, versus $9 million in Q3 2018 and $6 million in Q2 2019
- Played unlucky in Q3 which decreased Adjusted EBITDA by approximately $2 million, normalized Q3 Adjusted EBITDA of $4 million, versus $13 million in Q3 2018 and $2 million in Q2 2019
- Hotel occupancy for Q3 was virtually 100%
Balance Sheet: Healthy and Liquid Balance Sheet
- As at 30 September 2019, cash and liquid investments were $49.2 billion and net cash was $47.2 billion
- As at 30 September 2019, debt was $2.0 billion primarily reflects ongoing treasury yield management initiative
- Paid the previously announced special dividend of $0.46 per share on 25 October 2019
Development Update: Continue to Pursue Development Opportunities
- Continue to progress with the previously announced $1.5 billion renovation enhancement program in both Galaxy Macau™ and StarWorld Macau
- Cotai Phases 3 & 4 – Continue with development works for Phases 3 & 4, with a strong focus on non-gaming, primarily targeting MICE, entertainment, family facilities and also including gaming
- In August 2019 we introduced Galaxy International Convention Center (GICC) and Galaxy Arena and we are pleased to welcome Hyatt Hotel’s first Andaz Hotel to Macau and the Galaxy Resorts
- Hengqin – Refining our plans for a lifestyle resort to complement our high-energy entertainment resorts in Macau
- International – Continuously exploring opportunities in overseas markets, including Japan
Dr. Lui Che Woo, Chairman of GEG said:
“Today I am pleased to report the third quarter results for the Group in 2019. Given the overall market conditions and weaker global consumer sentiment we believe the Group has delivered solid financial results. Macau has faced numerous headwinds in 2019, these includes ongoing trade tensions, a slowing global economy, regional competition, currency fluctuation, disruptions in Hong Kong among others. These events have been impacting consumer sentiment and subsequent spending habits.
Despite the above mentioned challenges, in Q3 2019 Group Net Revenue decreased only 2% year-on-year to $12.7 billion and Adjusted EBITDA increased 6% year-on-year to $4.1 billion. Our balance sheet continued to be solid with total cash and liquid investments of $49.2 billion and net cash of $47.2 billion. Our solid balance sheet and cash flow from operations allows us to return capital to shareholders through dividends, fund our development pipeline and pursue our international expansion ambitions. On 25 October 2019 we paid a special dividend of $0.46 per share. These dividends demonstrate our continued confidence in the longer term outlook of Macau and the Company.
We continue to progress with our $1.5 billion property enhancement program at Galaxy Macau™ and StarWorld Macau, the program continues on schedule and on budget. We are pleased to have recently completed the renovation of two VIP rooms which have been well received by our customers. We will continue to enhance our resorts and anticipate the full program will be completed by mid-2020.
Furthermore, we continue our construction works of Cotai Phases 3 & 4 and continue to refine our development plans for a lifestyle resort in Hengqin. Regarding our expansion efforts in Japan, we continue to strengthen our Japan Development team and build our resources as we move forward in the Integrated Resort process.
In August 2019, we introduced Galaxy International Convention Center (GICC) and Galaxy Arena. GICC includes a world class event venue with total MICE space of 400,000 square feet and a 500,000 square feet 16,000-seat Galaxy Arena. The GICC 100,000 square feet pillar-less Exhibition Hall can host 7,000 guests lecture style, or 2,400 guests banquet hall style, additionally there is a 650-seat Auditorium. We are pleased to welcome Hyatt Hotel’s first Andaz Hotel to Macau which will offer 700 high-end and family rooms within the Galaxy Resorts Precinct.
On 25 August 2019, Mr. Ho Iat Seng was elected as the new Macau Chief Executive and he will assume office on 20 December 2019. We welcome the new Chief Executive and we will actively work with him and support his policies.
We remain confident in the medium to longer term outlook for Macau in general and GEG specifically. Our confidence is supported by the continued growth in demand for tourism, leisure and travel from Mainland China. We also believe the integration of Macau into the Greater Bay Area will be positive for the development of Macau. We are committed to supporting the Macau Government’s vision to develop Macau into a World Center of Tourism and Leisure.
Finally, I would like to thank all of our team members who deliver ‘World Class, Asian Heart’ service each and every day and contribute to the success of the Group.”
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