Galaxy Entertainment sees 19% earnings increase in 2018
Galaxy Entertainment Group reported earnings for 2018 last week, demonstrating a solid uptick in earnings and a strong underlying business. Partly, this is down to favourable conditions in Macau which, despite a number of impediments to business (such as a slowdown in the Chinese economy and the introduction of smoking restrictions), saw 10% more visitors than it did in 2017. But it’s also true that Galaxy looks better positioned than most of its competitors in the region.
Galaxy’s share price has appreciated by 13% so far this year
Source: Yahoo Finance
For the full year, Galaxy Entertainment Group saw a 14% year on year rise in net revenue to $55.2 billion. And, if Galaxy performed well on the top-line, it did even better on the bottom: earnings before interest, tax, depreciation, and amortisation (EBITDA), rose 19% against 2017 to $16.9 billion. The bulk of these earnings came from the Galaxy Macau, which saw net revenue increase by 14% year on year, and EBITDA rise by 16% over the same period.
Dr. Lui Che Woo, Galaxy Entertainment Group’s chairman, noted that the company’s success was even more impressive when viewed in light of “continuing competitive openings in both Macau and regionally and a number of geo-political and economic issues that impacted consumer sentiments.” One of these, he chose to elaborate on: “During 2018, Macau experienced another strong typhoon in September which resulted for the first time in the closure of casinos for a modest period of time. Due to the careful planning by the Macau government, damage to Macau and properties was minimal and there were only minor personal injuries but more importantly there were no fatalities.” He continued to praise his employees, without whom the company would not have managed “to achieve these solid financial results.”
Analysts have responded favourably to the report, with Union Gaming analyst Grant Govertsen telling investors: “we continue to view Galaxy as the best operator in the market today and expect the company to notably outperform in the event of a down market given a growing customer preference for Galaxy product/experience with all other things being equal.”
Dominion holds Galaxy Entertainment Group in its Global Trends Luxury Fund.
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