Monday, April 22, 2024

Galaxy Entertainment Group Reports Q4 & Annual 2023 Results

Galaxy Entertainment Group Reports Q4 & Annual 2023 Results

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GEG FY23 EBITDA

GEG FY23 EBITDA
GEG 23Q4 Quarterly EBITDA

GEG 23Q4 Quarterly EBITDA
Latest photo of Cotai Phase 4 (January 2024)

Latest photo of Cotai Phase 4 (January 2024)

Q4 2023 Group Adjusted EBITDA of $2.8 Billion,
Versus $(163) Million in Q4 2022

2023 Full Year Group Adjusted EBITDA of $10.0 Billion
Versus $(0.6) Billion in 2022

2023 Full Year Group NPAS of $6.8 Billion
Versus $(3.4) Billion in 2022

Announced Another Special Dividend of $0.30 Per Share

HONG KONG, Feb. 28, 2024 (GLOBE NEWSWIRE) — Galaxy Entertainment Group (“GEG”, “Company” or the “Group”) (HKEx stock code: 27) today reported results for the three-month and twelve-month periods ended 31 December 2023. (All amounts are expressed in HKD unless otherwise stated).

Dr. Lui Che Woo, Chairman of GEG said:

“Today I am pleased to provide an update on our financial results for Q4 and full year 2023. At GEG, we continue to drive every segment of the business with a particular focus on the mass business and continue to allocate resources to their most efficient use. Our efforts are reflected in full year Adjusted EBITDA of $10.0 billion, versus $(0.6) billion in 2022. This was despite continuing competition in both Macau and regionally and a number of geo-political and economic issues that impacted consumer sentiment.

Our balance sheet continued to be solid with total cash and liquid investments of $25.0 billion and net cash of $23.5 billion as of 31 December 2023. We paid a special dividend of $0.20 per share on 27 October 2023 and we are pleased to announce another special dividend of $0.30 per share to be paid on or about 26 April 2024. We are the first Macau concessionaire to resume dividends and return capital to shareholders after the border reopened. These dividends demonstrate our continued confidence in the longer-term outlook of Macau and for the Company. Our solid balance sheet and cash flow from operations allows us to fund our development pipeline and pursue our international expansion ambitions.

In 2023 GEG had a busy year with the completion of multiple development projects. These included the opening of the 450 all-suite Raffles at Galaxy Macau and the new premium mass Horizon Club, the opening of both the Galaxy International Convention Centre (“GICC”) and Galaxy Arena. The progressive opening of Andaz Macau was fully opened prior to Chinese New Year 2024. In 2023, GEG held approximately 200 MICE events and 85 concerts and performances across GICC, Galaxy Arena and Broadway Theatre.

Moving to Phase 4, we continue to progress with its construction. Phase 4 is approximately 600,000 square meters of development and is scheduled to complete in 2027. Phase 4 will include multiple high-end hotel brands new to Macau, together with a 4000-seat theater, extensive F&B, retail, non-gaming amenities, landscaping, a water resort deck and a casino, which is targeted to capture the ongoing expanding market that seeks a more encompassing lifestyle experience.

Furthermore, we are actively working with the MGTO to develop international markets. We are aligning our business accordingly and supporting the Government’s vision. Non-gaming is focused on attracting a broader range of customers to our resorts, leveraging our existing facilities and growing the overall market. These efforts will take time and we are doing our best. GEG has opened overseas offices in Tokyo and Seoul in 2023, and will soon be opening another office in Bangkok. The competition for high-value international tourists is significant and we will strive to support this Government initiative.

Macau’s Gross Gaming Revenue (“GGR”) for 2023 exceeded MOP1801 billion. In accordance with the gaming concession agreement, the six concessionaires will increase their investment commitments by 20% over the term of the concession. This demonstrates our support to the Government in developing Macau into the World Centre of Tourism and Leisure.

Finally, I would like to thank all our team members who deliver ‘World Class, Asian Heart’ service each and every day and contribute to the success of the Group.”

Q4 & FULL YEAR 2023 RESULTS HIGHLIGHTS

GEG: Well Positioned for Future Growth

  • Full Year Group Net Revenue of $35.7 billion, up 211% year-on-year
  • Full Year Group Adjusted EBITDA of $10.0 billion versus $(0.6) billion in 2022
  • Full Year Group NPAS of $6.8 billion versus $(3.4) billion in 2022
  • Full year Adjusted NPAS of $7.5 billion after adjusting for non-recurring and other charges
  • Q4 Group Net Revenue of $10.3 billion, up 254% year-on-year and up 7% quarter-on-quarter
  • Q4 Group Adjusted EBITDA of $2.8 billion, versus $(0.2) billion in Q4 2022 and $2.8 billion in Q3 2023
  • Played unlucky which decreased Adjusted EBITDA by approximately $103 million, normalized Q4 Adjusted EBITDA of $2.9 billion, versus $(0.1) billion in Q4 2022 and $2.9 billion in Q3 2023

Galaxy MacauTM: Well Positioned for Future Growth

  • Full Year Net Revenue of $27.7 billion, up 274% year-on-year
  • Full Year Adjusted EBITDA of $9.1 billion, versus $295 million in 2022
  • Q4 Net Revenue of $8.2 billion, up 347% year-on-year and up 7% quarter-on-quarter
  • Q4 Adjusted EBITDA of $2.6 billion, versus $58 million in Q4 2022 and $2.6 billion in Q3 2023
  • Played unlucky in Q4 which decreased Adjusted EBITDA by approximately $107 million, normalized Q4 Adjusted EBITDA of $2.7 billion, versus $98 million in Q4 2022 and $2.7 billion in Q3 2023
  • Hotel occupancy for Q4 across the seven hotels was 95%

StarWorld Macau: Well Positioned for Future Growth

  • Full Year Net Revenue of $4.6 billion, up 343% year-on-year
  • Full Year Adjusted EBITDA of $1.3 billion versus $(0.5) billion in 2022
  • Q4 Net Revenue of $1.3 billion, up 410% year-on-year and up 2% quarter-on-quarter
  • Q4 Adjusted EBITDA of $353 million, versus $(142) million in Q4 2022 and $347 million in Q3 2023
  • Played lucky in Q4 which increased Adjusted EBITDA by approximately $4 million, normalized Q4 Adjusted EBITDA of $349 million, up 346% year-on-year and down 1% quarter-on-quarter
  • Hotel occupancy for Q4 was 100%

Broadway Macau™, City Clubs and Construction Materials Division

  • Broadway Macau™: Full Year Adjusted EBITDA of $(36) million, versus $(62) million in 2022. In Q4 2023 Adjusted EBITDA was $(2) million, versus $(10) million in Q4 2022 and $(14) million in Q3 2023
  • City Clubs: Full Year Adjusted EBITDA of $15 million, versus $(21) million in 2022. In Q4 2023 Adjusted EBITDA was $3 million, up 121% year-on-year and down 40% quarter-on-quarter
  • Construction Materials Division: Full Year Adjusted EBITDA of $698 million, up 23% year-on-year. In Q4 2023, Adjusted EBITDA was $205 million, up 28% year-on-year and up 25% quarter-on-quarter

Balance Sheet: Maintain a Healthy and Liquid Balance Sheet

  • As at 31 December 2023, cash and liquid investments were $25.0 billion and net cash was $23.5 billion
  • As at 31 December 2023, debt was $1.5 billion
  • Paid a special dividend of $0.20 per share on 27 October 2023
  • Announced another special dividend of $0.30 per share payable on or about 26 April 2024

Development Update: Opened Phase 3 including GICC, Galaxy Arena, Raffles at Galaxy Macau and Andaz Macau; Progressing with Phase 4

  • Cotai Phase 3 – Opened GICC, Galaxy Arena, Raffles at Galaxy Macau and Andaz Macau
  • Cotai Phase 4 – Our efforts are firmly focused on the development of Phase 4. Phase 4 has a strong focus on non-gaming, primarily targeting MICE, entertainment, family facilities and also includes gaming

Macau Market Overview

Based on DICJ reporting, Macau’s GGR for 2023 was $177.7 billion, up 334% year-on-year. GGR in Q4 2023 was $52.5 billion, up 421% year-on-year and up 11% quarter-on-quarter.

In 2023, visitor arrivals to Macau were 28.2 million, up 395% year-on-year, which has recovered to 72% of 2019. Overnight visitors were 14.2 million, increased 472% year-on-year. Mainland visitor arrivals to Macau were 19 million, up 273% year-on-year, with Individual Visit Scheme visitors were 10.6 million, up 532% year-on-year. The numbers of Mainland, Hong Kong and international visitors in 2023 returned to 68%, 98% and 48% of the corresponding levels of pre-COVID.

Group Financial Results

Full Year 2023

The Group posted Net Revenue of $35.7 billion, up 211% year-on-year. Adjusted EBITDA was $10.0 billion versus $(0.6) billion in 2022. NPAS was $6.8 billion versus $(3.4) billion in 2022. Galaxy Macau™’s Adjusted EBITDA was $9.1 billion, versus $295 million in 2022. StarWorld Macau’s Adjusted EBITDA was $1.3 billion versus $(527) million in 2022. Broadway Macau™’s Adjusted EBITDA was $(36) million versus $(62) million in 2022.

In 2023, GEG played unlucky in its gaming operation which decreased its Adjusted EBITDA by approximately $162 million. Normalized Adjusted EBITDA was $10.1 billion versus $(520) million in 2022.

GEG FY23 EBITDA

Summary table of GEG Q4 and full year 2023 Adjusted EBITDA and adjustments:

in HK$’m Q4 2022 Q3 2023 Q4 2023 QoQ FY 2022 FY 2023
Adjusted EBITDA (163) 2,768 2,807 1% (553) 9,955
Luck2 (40) (122) (103) (33) (162)
Normalized Adjusted EBITDA (123) 2,890 2,910 1% (520) 10,117

The Group’s total GGR on a management basis3 in 2023 was $31.7 billion, up 322% year-on-year. Mass GGR was $26.5 billion, up 328% year-on-year. VIP GGR was $3.4 billion, up 273% year-on-year. Electronic GGR was $1.8 billion, up 340% year-on-year.

Group Key Financial Data

(HK$’m) 2022 2023
Revenues:
Net Gaming 6,566 27,290
Non-gaming 2,021 5,396
Construction Materials 2,887 2,998
Total Net Revenue 11,474 35,684
Adjusted EBITDA (553) 9,955
Gaming Statistics4
(HK$’m)
2022 2023
Rolling Chip Volume5 31,157 117,660
Win Rate % 3.0% 2.9%
Win 923 3,447
Mass Table Drop6 23,685 107,531
Win Rate % 26.1% 24.6%
Win 6,188 26,486
Electronic Gaming Volume 11,679 50,884
Win Rate % 3.5% 3.5%
Win 405 1,780
Total GGR Win7 7,516 31,713


Balance Sheet and Dividend

The Group’s balance sheet remains healthy and liquid. As of 31 December 2023, cash and liquid investments were $25.0 billion and net cash was $23.5 billion. Debt was $1.5 billion which primarily reflects our ongoing treasury yield management initiatives. Our strong balance sheet combined with substantial cash flow from operations allows us to return capital to shareholders via dividends and to fund our development pipeline. The Group paid a special dividend of $0.20 per share on 27 October 2023. Subsequently we announced a special dividend of $0.30 per share to be paid on or about 26 April 2024. This attests to our confidence in Macau, our financial strength and our future earnings potential.

Q4 2023

The Group’s Net Revenue was $10.3 billion, up 254% year-on-year and up 7% quarter-on-quarter. Adjusted EBITDA was $2.8 billion, versus $(163) million in Q4 2022 and $2.8 billion in Q3 2023. Galaxy Macau™’s Adjusted EBITDA was $2.6 billion, versus $58 million in Q4 2022 and $2.6 billion in Q3 2023. StarWorld Macau’s Adjusted EBITDA was $353 million, versus $(142) million in Q4 2022 and $347 million in Q3 2023. Broadway Macau™’s Adjusted EBITDA was $(2) million, versus $(10) million in Q4 2022 and $(14) million in Q3 2023.

GEG 23Q4 Quarterly EBITDA

During Q4 2023, GEG played unlucky in its gaming operations which decreased its Adjusted EBITDA by approximately $103 million. Normalized Adjusted EBITDA was $2.9 billion, versus $(123) million in Q4 2022 and $2.9 billion in Q3 2023.

The Group’s total GGR on a management basis in Q4 2023 was $9.2 billion, up 407% year-on-year and up 6% quarter-on-quarter. Mass GGR was $7.8 billion, up 398% year-on-year, up 5% quarter-on-quarter. VIP GGR was $909 million, up 514% year-on-year and up 12% quarter-on-quarter. Electronic GGR was $508 million, up 393% year-on-year and up 3% quarter-on-quarter.

Group Key Financial Data
(HK$’m)
Q4 2022 Q3 2023 Q4 2023 FY2022 FY2023
Revenues:
Net Gaming 1,615 7,417 7,961 6,566 27,290
Non-gaming 504 1,520 1,580 2,021 5,396
Construction Materials 797 713 778 2,887 2,998
Total Net Revenue 2,916 9,650 10,319 11,474 35,684
Adjusted EBITDA (163) 2,768 2,807 (553) 9,955
Gaming Statistics8
(HK$’m)
Q4 2022 Q3 2023 Q4 2023 FY2022 FY2023
Rolling Chip Volume9 6,815 32,459 34,599 31,157 117,660
Win Rate % 2.2% 2.5% 2.6% 3.0% 2.9%
Win 148 813 909 923 3,447
Mass Table Drop10 6,311 29,906 30,696 23,685 107,531
Win Rate % 24.9% 24.9% 25.5% 26.1% 24.6%
Win 1,573 7,441 7,826 6,188 26,486
Electronic Gaming Volume 2,964 14,298 16,383 11,679 50,884
Win Rate % 3.5% 3.4% 3.1% 3.5% 3.5%
Win 103 492 508 405 1,780
Total GGR Win11 1,824 8,746 9,243 7,516 31,713

Galaxy Macau™

Galaxy Macau™ is the primary contributor to Group revenue and earnings. In 2023, Net Revenue was $27.7 billion, up 274% year-on-year. Adjusted EBITDA was $9.1 billion, versus $295 million in 2022. Galaxy Macau™ played unlucky in its gaming operations which decreased its Adjusted EBITDA by approximately $162 million. Normalized 2023 Adjusted EBITDA was $9.3 billion, up 2,739% year-on-year.

In Q4 2023, Galaxy Macau™’s Net Revenue was $8.2 billion, up 347% year-on-year and up 7% quarter-on-quarter. Adjusted EBITDA was $2.6 billion, versus $58 million in Q4 2022 and $2.6 billion in Q3 2023. Galaxy Macau™ played unlucky in its gaming operations which decreased its Adjusted EBITDA by approximately $107 million. Normalized Q4 2023 Adjusted EBITDA was $2.7 billion, versus $98 million in Q4 2022 and $2.7 billion in Q3 2023.

The combined seven hotels occupancy was 95% for Q4 and 87% for the full year 2023.

Galaxy Macau™ Key Financial Data
(HK$’m)
Q4 2022 Q3 2023 Q4 2023 FY2022 FY2023
Revenues:
Net Gaming 1,378 6,258 6,781 5,560 22,911
Hotel / F&B / Others 208 1,004 1,046 782 3,246
Mall 248 366 364 1,076 1,560
Total Net Revenue 1,834 7,628 8,191 7,418 27,717
Adjusted EBITDA 58 2,562 2,569 295 9,149
Adjusted EBITDA Margin 3% 34% 31% 4% 33%
Gaming Statistics12
(HK$’m) Q4 2022 Q3 2023 Q4 2023 FY2022 FY2023
Rolling Chip Volume13 6,815 31,090 33,874 31,157 115,566
Win Rate % 2.2% 2.5% 2.6% 3.0% 2.9%
Win 148 778 880 923 3,383
Mass Table Drop14 4,916 22,812 23,692 17,282 80,774
Win Rate % 27.2% 27.2% 27.7% 29.0% 27.0%
Win 1,335 6,197 6,570 5,012 21,775
Electronic Gaming Volume 1,925 10,188 10,650 7,556 35,542
Win Rate % 4.2% 4.0% 3.9% 4.3% 4.2%
Win 81 411 418 323 1,499
Total GGR Win 1,564 7,386 7,868 6,258 26,657

StarWorld Macau

In 2023, StarWorld Macau’s Net Revenue was $4.6 billion, up 343% year-on-year. Adjusted EBITDA was $1.3 billion versus $(527) million in 2022. There was no luck impact on StarWorld Macau’s Adjusted EBITDA in 2023.

In Q4 2023, StarWorld Macau’s Net Revenue was $1.3 billion, up 410% year-on-year and up 2% quarter-on-quarter. Adjusted EBITDA was $353 million, up 349% year-on-year and up 2% quarter-on-quarter. StarWorld Macau played lucky in its gaming operations which increased its Adjusted EBITDA by approximately $4 million in Q4 2023. Normalized Adjusted EBITDA was $349 million, up 346% year-on-year and down 1% quarter-on-quarter.

Hotel occupancy was 100% for Q4 and 99% for the full year 2023.

StarWorld Macau Key Financial Data
(HK$’m)
Q4 2022 Q3 2023 Q4 2023 FY2022 FY2023
Revenues:
Net Gaming 217 1,101 1,122 945 4,154
Hotel / F&B / Others 24 121 127 85 468
Mall 5 6 6 18 22
Total Net Revenue 246 1,228 1,255 1,048 4,644
Adjusted EBITDA (142) 347 353 (527) 1,278
Adjusted EBITDA Margin NEG15 28% 28% NEG15 28%
Gaming Statistics16
(HK$’m)
Q4 2022 Q3 2023 Q4 2023 FY2022 FY2023
Rolling Chip Volume17 N/A 1,369 725 N/A 2,094
Win Rate % N/A 2.6% 4.0% N/A 3.1%
Win N/A 35 29 N/A 64
Mass Table Drop18 1,320 6,830 6,748 5,280 25,709
Win Rate % 17.3% 17.6% 18.0% 18.7% 17.7%
Win 229 1,204 1,217 985 4,553
Electronic Gaming Volume 522 2,981 4,533 1,567 11,170
Win Rate % 2.4% 2.1% 1.6% 2.4% 1.9%
Win 12 62 72 37 214
Total GGR Win 241 1,301 1,318 1,022 4,831

Broadway Macau™

Broadway Macau™ is a unique family friendly, street entertainment and food resort supported by Macau SMEs. In 2023, Broadway Macau™’s Net Revenue was $103 million, up 72% year-on-year. Adjusted EBITDA was $(36) million versus $(62) million in 2022.

In Q4 2023, Broadway Macau’s Net Revenue was $38 million, up 100% year-on-year and up 58% quarter-on-quarter. Adjusted EBITDA was $(2) million, versus $(10) million in Q4 2022 and $(14) million in Q3 2023.

City Clubs

In 2023, City Clubs’ Net Revenue was $222 million, up 264% year-on-year. Adjusted EBITDA was $15 million versus $(21) million in 2022. In Q4 2023, City Clubs’ Net Revenue was $57 million, up 185% year-on-year and flat quarter-on-quarter. Adjusted EBITDA was $3 million, up 121% year-on-year and down 40% quarter-on-quarter.

Construction Materials Division (“CMD”)

In 2023, CMD experienced a solid year. For the full year Adjusted EBITDA was $698 million, up 23% year-on-year. In Q4 2023, CMD’s Adjusted EBITDA was $205 million, up 28% year-on-year and up 25% quarter-on-quarter.

In Hong Kong CMD experienced strong demand for ready-mixed concrete and precast products from the Hong Kong International Airport’s three runway project and associated infrastructure development. The contractors have been working to accelerate the project to catch up from COVID-19 related construction delays. In Macau, the development works in Zone A reclamation area compensated for a softening of local market demand for ready-mixed concrete and piles. Business in Mainland China was adversely impacted by the slowing of property development. It is anticipated that demand in Mainland China will remain subdued in the immediate future.

Development Update

Galaxy Macau™ and StarWorld Macau

We continue to make ongoing progressive enhancements to our resorts to ensure that they remain competitive and appealing to our guests with a particular focus on adding new and innovative F&B and retail offerings.

We are actively reconfiguring the main gaming floor of Galaxy Macau™ to deliver a better flow of people across the entire floor and to provide an enhanced customer experience. In late 2023, we relocated the central premium mass high limit gaming area and added a number of F&B options. We are also currently completing the construction of a new high limit slot area and other amenities.

At StarWorld Macau we are evaluating a range of major upgrades, that includes the main gaming floor, the lobby arrival experience and increasing the F&B options.

Cotai – The Next Chapter

We have successfully opened GICC, Galaxy Arena, Raffles at Galaxy Macau and Andaz Macau. We are now firmly focused on the development of Phase 4, which is already well under way. Phase 4 will include multiple high-end hotel brands new to Macau, together with a 4000-seat theater, extensive F&B, retail, non-gaming amenities, landscaping, a water resort deck and a casino. Phase 4 is approximately 600,000 square meters of development and is scheduled to complete in 2027. We will continue to adjust the development timeline in accordance with the market demand. We remain highly confident about the future of Macau where Phases 3 & 4 will support Macau’s vision of becoming a World Centre of Tourism and Leisure.

Latest photo of Cotai Phase 4 (January 2024)

Latest photo of Cotai Phase 4 (January 2024)

Selected Major Awards for 2023

AWARD PRESENTER
GEG
Best Gaming Operator Asia Gaming Awards 2023
2023 IAG Academy IR Awards:

  • Best Integrated Resort
  • Best Overall F&B Offering by an IR
  • Best CSR Initiative – GEG Integrated Resort Youth Development Program
Inside Asian Gaming
Sustainability Award International Gaming Awards 2023
2023 PATA Gold Award for Climate Change Initiative Pacific Asia Travel Association
4th Greater Bay Area Business Sustainability Index – Top 20 Centre for Business Sustainability of the Chinese University of Hong Kong
Outstanding Corporate Social Responsibility Award Mirror Post of Hong Kong
2023 Macao International Environmental Co-operation Forum & Exhibition – Certificate of Appreciation – Green Booth Macau Fair & Trade Association
GALAXY MACAUTM
Michelin One-Star Restaurant

  • 8½ Otto e Mezzo BOMBANA
  • Lai Heen
The MICHELIN Guide Hong Kong Macau 2023
2023 Forbes Travel Guide Five-Star Hotel

  • Banyan Tree Macau
  • Galaxy Hotel™
  • Hotel Okura Macau
  • The Ritz-Carlton, Macau

2023 Forbes Travel Guide Five-Star Restaurant

  • 8½ Otto e Mezzo BOMBANA
  • Lai Heen

2023 Forbes Travel Guide Five-Star Spa

  • Banyan Tree Spa Macau
  • The Ritz-Carlton Spa, Macau
Forbes Travel Guide
Best Luxury Hotel – Raffles at Galaxy Macau
Best Trendy Hotel – Andaz Macau
The Bund Design Hotel Awards
One-Diamond rating – 8½ Otto e Mezzo BOMBANA 2024 Black Pearl Restaurant Guide
EarthCheck Gold Certification

  • Banyan Tree Macau

EarthCheck Silver Certification

  • Galaxy Hotel™
  • Hotel Okura Macau
EarthCheck
Macao Green Hotel Awards – Gold Award:

  • Banyan Tree Macau
  • JW Marriott Hotel Macau
  • Hotel Okura Macau
  • The Ritz-Carlton, Macau

Macao Green Hotel Awards – Silver Award

  • Galaxy Hotel™
Environmental Protection Bureau of the Macau SAR Government
Wine Spectator’s 2023 Restaurant Best of Award of Excellence – Terrazza Italian Restaurant Wine Spectator’s Restaurant Awards
STARWORLD MACAU
Michelin Two-Star Restaurant – Feng Wei Ju The MICHELIN Guide Hong Kong Macau 2023
One-Diamond rating – Feng Wei Ju 2024 Black Pearl Restaurant Guide
SCMP 100 Top Tables 2023 Award – Feng Wei Ju South China Morning Post
Trip.com Global Elite Restaurant List 2023 – Platinum Award – Feng Wei Ju Trip.com
Favorite Food Awards 2023 – Feng Wei Ju U Magazine
Broadway MacauTM
Macao Green Hotel Awards – Silver Award Environmental Protection Bureau of the Macau SAR Government
Construction Materials Division
Caring Company Scheme – 20 Years Plus Caring Company Logo The Hong Kong Council of Social Service
2022-23 Good Employer 5 Years+ e-Contribution Award and MPF Support Award The Mandatory Provident Fund Schemes Authority
BOCHK Corporate Low-Carbon Environmental Leadership Awards 2022 – EcoPartners & EcoPioneer & Low-Carbon Commitment Federation of Hong Kong Industries
22th Hong Kong Occupational Safety & Health Award – Safety Performance Award – All Industries – Outstanding Award Labour Department / Occupational Safety and Health Council
2022 Hong Kong Awards for Environmental Excellence – Manufacturing and Industrial Services – Certificate of Merit Environmental Campaign Committee


Outlook

We would like to take this opportunity to comment on how we see the longer-term outlook for Macau in general and GEG specifically. Our balance sheet remains exceptionally strong with $23.5 billion net cash and with minimal debt. We have substantial positive cash flow from operations, and we have positive NPAS. In fact, the strength of our Company can be demonstrated with today’s announcement of another dividend to be payable in April this year.

Our resorts continue to remain extremely popular with near 100% occupancy across our approximately 5,000 hotel rooms. Our mass gaming drop and revenue in the recent Chinese New Year was 120% of 2019 level. Total visitation for the 8-day Chinese New Year was 1.4 million with daily average visitation of 167,725. Daily visitation rose 163% when compared with 2023 Chinese New Year Golden Week. Mainland visitors represented 76% of the total visitation, it has grown about 242% when compared with 2023 Chinese New Year Golden Week.

The Macau Government will spend an estimated MOP235 million this year to attract international visitors to Macau by actively promoting Macau in overseas destinations through roadshows and subsidizing airline tickets to Macau. We are actively supporting this important Government initiative through both attending their international marketing event and opening GEG international business development offices within the region. Macau welcomed 28 million visitors in 2023 and the MGTO expects Macau will receive around 33 million visitors in 2024.

We continue with the development of Phase 4, which we target to open in 2027. Phase 4 is the next generation integrated resort which has a strong focus on non-gaming, targeting entertainment, family facilities and also includes gaming. These projects will complete our ecosystem in Cotai and strategically position GEG for future growth.

Infrastructure continues to improve access to Macau and movement within Macau. The fourth cross-sea bridge linking Macau Peninsula and Taipa is expected to be completed in 2024. Furthermore, Light Rail Transit’s new Macau Barra station, which connects Taipa with the Macau peninsula, opened in December 2023. The improvement of infrastructure will increase the accessibility and convenience for tourists and Macau citizens.

We remain very confident in the longer-term outlook for Macau and believe that our resorts offer a unique range of facilities and experiences to our guests that will continue to attract high value customers to Macau and further broaden the addressable visitor markets.

We are very pleased to welcome the 75th anniversary of the founding of the People’s Republic of China and the 25th anniversary of Macau’s return in 2024. We hope that the industry will continue to receive the full support of the Central Government and the Macau SAR Government. As always GEG will support these important milestones with a range of supportive promotional activities.

Shorter term we acknowledge that globally the world is experiencing both geo-political and economic challenges that are impacting consumers and investors sentiment. However, we remain cautiously optimistic on the future of Macau and GEG. We still continue to explore overseas development opportunities on a case by case basis, but continue to believe that Macau offers the greatest growth opportunity.

About Galaxy Entertainment Group (HKEx stock code: 27)

Galaxy Entertainment Group (“GEG” or the “Group”) is one of the world’s leading resorts, hospitality and gaming companies. It primarily develops and operates a large portfolio of integrated resort, retail, dining, hotel and gaming facilities in Macau. The Group is listed on the Hong Kong Stock Exchange and is a constituent stock of the Hang Seng Index.

GEG was one of the three original concessionaires in Macau when the gaming industry was liberalized in 2002. In 2022, GEG was awarded a new gaming concession valid from January 1, 2023, to December 31, 2032. GEG has a successful track record of delivering innovative, spectacular and award-winning properties, products and services, underpinned by a “World Class, Asian Heart” service philosophy, that has enabled it to consistently outperform the market in Macau.

GEG operates three flagship destinations in Macau: on Cotai, Galaxy Macau™, one of the world’s largest integrated destination resorts, and the adjoining Broadway Macau™, a unique landmark entertainment and food street destination; and on the Peninsula, StarWorld Macau, an award-winning premium property.

The Group has the largest development pipeline of any concessionaire in Macau. When The Next Chapter of its Cotai development is completed, GEG’s resorts footprint on Cotai will be more than 2 million square meters, making the resorts, entertainment and MICE precinct one of the largest and most diverse integrated destinations in the world. GEG is also progressing plans for its Hengqin project and we are also expanding our focus beyond Hengqin and Macau to potentially include opportunities within the rapidly expanding Greater Bay Area. These projects will help GEG develop and support Macau in its vision of becoming a World Centre of Tourism and Leisure.

In July 2015, GEG made a strategic investment in Société Anonyme des Bains de Mer et du Cercle des Étrangers à Monaco (“Monte-Carlo SBM”), a world renowned owner and operator of iconic luxury hotels and resorts in the Principality of Monaco. GEG continues to explore a range of international development opportunities with Monte-Carlo SBM.

GEG is committed to delivering world class unique experiences to its guests and building a sustainable future for the communities in which it operates. For more information about the Group, please visit www.galaxyentertainment.com

_______________________

1 For the purpose of the new concession the investment threshold is stated in MOP.
2 Reflects luck adjustments associated with our rolling chip program.
3 The primary difference between statutory gross revenue and management basis gross revenue is the treatment of City Clubs revenue where fee income is reported on a statutory basis and gross gaming revenue is reported on a management basis, this difference is up to June 26, 2022. At the Group level the gaming statistics include Company owned resorts plus City Clubs.
4 Gaming statistics are presented before deducting commission and incentives.
5 Reflects sum of junket VIP and inhouse premium direct.
6 Mass table drop includes the amount of table drop plus cash chips purchased at the cage.
7 Total GGR win includes gaming win from City Clubs.
8 Gaming statistics are presented before deducting commission and incentives.
9 Reflects sum of junket VIP and inhouse premium direct.
10 Mass table drop includes the amount of table drop plus cash chips purchased at the cage.
11 Total GGR win includes gaming win from City Clubs.
12 Gaming statistics are presented before deducting commission and incentives.
13 Reflects sum of junket VIP and inhouse premium direct.
14 Mass table drop includes the amount of table drop plus cash chips purchased at the cage.
15 NEG represents negative margin.
16 Gaming statistics are presented before deducting commission and incentives.
17 Reflects inhouse premium direct.
18 Mass table drop includes the amount of table drop plus cash chips purchased at the cage.