Galaxy earnings plunge 46% on downturn, costs of new casinos
By Bloomberg
Galaxy Entertainment Group Ltd. reported second-quarter earnings plunged 46 percent on higher operation cost from its new casino resorts and amid a declining market in the city’s gambling industry.
Adjusted earnings before interest, taxes, depreciation and amortization at Galaxy dropped to HK$1.9 billion ($245 million) a year earlier, the casino operator controlled by billionaire Lui Che Woo said in a statement Wednesday. That compares with the HK$1.8 billion median estimate of five analysts compiled by Bloomberg.
Galaxy opened in May its HK$24.05 billion ($3.1 billion) second-phase expansion of a resort and an adjacent revamped property in the Cotai area, marking Macau’s first casino projects in three years. A wave of casino openings featuring more non-gaming amenities will open in the next few years which operators hope will draw more visitors back amid the city’s worst downturn in its history.
High-end gamblers have been staying away from Macau’s tables because of the slowing Chinese economy and widening of the country’s anti-graft campaign, leading Macau’s casino revenue to fall for a 14th month in July.
Galaxy led declines among casino shares ahead of its results, falling 4.1 percent to a month-low of HK$31.35 as of the mid-day break in Hong Kong trading. Sands China Ltd. and MGM China Holdings Ltd. both dropped 4 percent, while the benchmark Hang Seng Index slumped 1 percent.
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