Bloomberg News

Galaxy’s First-Quarter Profit Rises 12% on VIP Gambling Income

April 24, 2009

Galaxy Entertainment Group Ltd. (27), the Macau casino operator part-owned by Permira Advisers LLP, said first-quarter earnings before interest, tax, depreciation and amortization rose 11 percent on income from VIP gamblers.

The Hong Kong-listed company’s ebitda climbed to HK$233 million ($30 million) from HK$210 million a year earlier, according to a filing to the city’s stock exchange.

Galaxy’s revenue from VIP gamblers, or those who wager at least 1 million patacas ($125,000), rose 11.5 percent to HK$1.55 billion even as total gambling income for Macau fell 13 percent, the company said today.

“We are cautiously optimistic about the outlook in 2009,” Galaxy’s Deputy Chairman Francis Lui told reporters in Hong Kong.

Gambling revenue in Macau, the only region in China where casinos are legal, has fallen for the past year after the mainland tightened visa rules for visitors to the former Portuguese colony. The decline in monthly casino revenue has moderated, dropping 6 percent from a year earlier to 9.5 billion patacas in March, after falling 15.5 percent in February and 17 percent in January, according to Portuguese news agency Lusa.

Hotel occupancy rates in February fell 2 percent from a year earlier, the smallest drop in seven months, figures from the Macau Statistics and Census Service show.

The June 1 opening of rival Melco Crown Entertainment Ltd.’s $2.1 billion City of Dreams casino will indicate whether Macau’s gambling revenue has recovered, Galaxy’s Lui said.

“If the new property opens successfully, that proves that Macau’s gaming industry as a whole is recovering,” he said.

Galaxy rose 8.1 percent to close at HK$1.73 in Hong Kong trading. The stock has gained 63 percent this year, beating the 6.1 percent rise in the Hang Seng Index. (HSI)

To contact the reporter on this story: Chia-Peck Wong in Hong Kong at cpwong@bloomberg.net

To contact the editor responsible for this story: Frank Longid at flongid@bloomberg.net


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