Key points:
- Group net revenue came to HK$10.7bn (US$1.36bn), up 11% year-on-year
- Gaming revenue totalled HK$8.2bn; 76.8% of the net revenue total
- Galaxy Macau made HK$8.4bn, up 10% year-on-year
Galaxy Entertainment has released its financial results for the third quarter of 2024. In total, group net revenue came to HK$10.7bn (US$1.36bn), up 11% year-on-year, while group adjusted EBITDA reached HK$2.9bn, up 6%. "Unlucky play" decreased adjusted EBITDA by roughly HK$165m, according to the operator, with normalised adjusted EBITDA at HK$3.1bn; up 7% year-on-year.
Quarter-on-quarter, however, these figures reflect dips of 2%, 7% and 3% respectively.
The property also won the Casino Operator of the Year award from the Global Gaming Awards Asia-Pacific 2024, which occurred on 4 June.
By segment
Of the operator’s HK$10.7bn revenue, HK$8.2bn came from gaming – an increase of 10.5% year-on-year but a decline of 4.6% quarter-on-quarter. As such, gaming revenue accounted for 76.8% of the operator’s total revenue; less than competitor Melco, which reported 80.4% of its revenue from gaming in its Q3 results.
Non-gaming and construction material revenue, similarly, were up year-on-year. Non-gaming revenue came to HK$1.67bn, up 9.6% year-on-year, though unlike other verticals was also up quarter-on-quarter, by 12.3%. Construction material revenue came to HK$805m, up from HK$713m last year but down from HK$840m last quarter.
Breaking down gross gaming revenue (GGR) by gaming statistics, total GGR came to HK$10.15bn; up 16.1%. Rolling chip volume totalled HK$44.46bn, up over HK$10bn from this time last year (though down 3.7% quarter-on-quarter), with win totalling HK$1.1bn on a 2.5% win rate. While this rate remains stagnant year-on-year, it reflects growth of 35.3%.
Table drop reached HK$31.73bn, up 6.1% year-on-year and down 2% quarter-on-quarter. With a win rate of 26.4% – up from both last year’s 24.9% and last quarter’s 25.6% - win totalled HK$8.39bn; up 12.7% year-on-year and 1.1% quarter-on-quarter.
Electronic gaming volume totalled HK26.5bn; a sizeable increase from last year’s HK$14.3bn and an 18.5% increase quarter-on-quarter. Despite this, and likely due to a win rate decrease to 2.5%, win came to HK$666m for the quarter; growth of 35.4% year-on-year and 1.2% quarter-on-quarter.
Galaxy Macau
Revenue at Galaxy Macau totalled HK$8.4bn for the quarter. On trend, this was an increase of 10% year-on-year but a decline of 3% quarter-on-quarter. Adjusted EBITDA remained stagnant year-on-year at HK$2.6bn, though this reflects a dip of 8% quarter-on-quarter. This increases to HK$2.7bn at a normalised rate, up 2% year-on-year and down 3% quarter-on-quarter.
Across Galaxy Macau’s seven properties, hotel occupancy totalled 98%.
By vertical, gaming revenue for Galaxy Macau totalled HK$6.93bn; 82.5% of its total. Following overall trends from this segment, this reflects growth of 10.8% year-on-year but a dip of 5.6% year-on-year. Mall revenue, by contrast, is one of the few verticals to show quarter-on-quarter growth but a year-on-year decline, making HK$347m; up from last quarter’s HK$326m but down from last year’s HK$366m.
Hotel, food and beverage and other at Galaxy Macau totalled HK$1.13bn for the quarter, up 12.1% year-on-year and 15.9% quarter-on-quarter.
Total win GGR across Galaxy Macau’s seven properties came to HK8.64bn, with table drop contributing most significantly at HK$7.12bn; up both annually and quarterly and accounting for 82.4% of total win GGR. This can be attributed to a 1.8% annual increase and 0.4% quarterly increase in win rate to 29%, with table drop coming to HK$24.59bn; a slight dip from last quarter but an increase of 7.8%.
StarWorld Macau
Total net revenue from StarWorld Macau came to HK$1.34bn for the quarter, up 8.9% year-on-year and 1.1% quarter-on-quarter. Once again, gaming revenue accounted for the majority of this; 90.1%, infact – higher than Galaxy Entertainment’s average and higher than the average reported by Melco in Q3.
Hotel, food and beverage and other revenue remained mostly stagnant, up by HK$5m year-on-year and down HK$2m quarter-on-quarter to HK$126m. Mall revenue remained stagnant year-on-year at HK$6m, though this is a dip of HK$1m quarter-on-quarter.
Market overview and analysis
DICJ reports put Macau’s GGR for the quarter at HK$54bn, or MOP 55.6bn (US$6.95bn). For July, Macau’s GGR was MOP 18.6bn, up 11.6%, for August it was MOP 19.75bn, up 14.8% and for September it was MOP 17.25bn; yet despite being the lowest earning month of the quarter, saw the highest annual growth rate, up 15.5%. Though, these figures fall behind that reported in October of MOP 20.8bn ($2.6bn) – the highest monthly GGR for the year so far.
As such, Galaxy’s HK$10.15bn total GGR win accounts for 18.8% of the territories total GGR.
Compared to Melco and Wynn, which also released its Q3 results this week, Galaxy underperformed at 11% revenue growth compared to Melco’s 16%, though outperformed Wynn, where overall revenue was up just 1.2%. Wynn’s Macau operations were primarily bolstered by one property, Wynn Macau, where revenue was up 19.3%, while Wynn Palace revenue was down 1%.
Others from the big six to have reported their quarterly revenue include MGM and Las Vegas Sands. Sands saw revenue fall 4.3% to $2.68bn, while MGM China reported revenue of $929.5m for Q3, up 14.4%. As such, it seems Galaxy Entertainment has found itself squarely in the middle in terms of growth among the competition, growing less than MGM China and Melco but not reporting a decline as Wynn Palace and Las Vegas Sands have.
Non-gaming was up both year-on-year and quarter-on-quarter across Galaxy Entertainment, at growth rates of 9.6% year-on-year and 12.3% respectively. Despite a push for non-gaming in the territory following the pandemic (something brought up in the 2024 CEO Special with MGM China President & COO Hubert Wang), this also seems to have been a mixed bag among the big six. For Melco, non-gaming revenue was up at City of Dreams, Altira and Studio City – up 13% to $89.3m at the latter, though at Wynn Macau, room and entertainment, retail and other revenue were down 24.9% and 19.6% respectively. Once again, Galaxy finds itself in the middle compared to its peers; not growing as rapidly as others, but not reporting declines, either.
A Q3 report from SJM is expected to be published in the week beginning Monday 11 November.
Comments
On the results, Galaxy Entertainment Chairman Dr. Lui Che Woo said: “Today I am pleased to report the third quarter results for the Group in 2024. In Q3 2024 group net revenue increased 11% year-on-year to HK$10.7bn and adjusted EBITDA increased 6% year-on-year to HK$2.9bn, played unlucky in Q3 which decreased adjusted EBITDA by approximately HK$165m.
“For the recent National Day Golden Week holiday, we were pleased that Macau recorded a total of 993,117 visitor arrivals. The daily average number of visitor arrivals during the seven-day period reached nearly 102% of the corresponding period in pre-pandemic 2019. Macau hotels’ average guestroom occupancy stood at 95% during the period. Our balance sheet continued to be healthy and liquid with total cash and liquid investments of HK$28.6bn and the net position was HK$27.4bn after debt of HK$1.2bn.
"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 2024, we paid the previously announced interim dividend of HK$0.50 per share. These dividends demonstrate our continued confidence in the longer-term outlook of Macau and for the Company.
“On the development front, we continue to move forward with the fitting out of the Capella at Galaxy Macau and Phase 4, which has a strong focus on non-gaming, primarily targeting entertainment, family facilities and includes gaming.”
