Representatives of Galaxy Entertainment Group Ltd. revealed information about company’s financial performance during Q4 and its full-year revenue. According to the numbers reported, the revenue during Q4 of 2014 decreased by 25%.
The rapid decline was attributed to the intensified anti-corruption campaign started by Xi Jinping. The measures taken by Chinese authorities made high-roller players choose another gambling destination which, had a devastating effect on the economy as a whole.
The company released a special statement on the matter earlier today and it seems like the predictions of several market analysts were quite precise. Compared to the results reported a year ago, the adjusted earnings before interest, taxes, depreciation and amortization decreased to reach HK$2.7 billion or $348 million.
Speaking of the general forecast of market analysts, it is not too optimistic. Despite the anticipated slight increase, the opposite seems more likely to happen. Annual decrease of approximately 8% is expected and the worst of all is that the intensified anti-corruption campaign deters high-roller players from trying their luck in Macau-based casinos.
During Q4 of 2014, the economy of the administrative region underwent a shrink of 17.2% mainly due to the aforementioned anti-corruption campaign. However, the implementation of the smoking ban as well as the visa restrictions also affected the business of Galaxy Entertainment in a negative manner.
As far as the full-year revenue of Galaxy Entertainment is concerned, an increase of 9% YOY has been reported despite the lack of high-rollers. It reached HK$71.8 billion; the full-year EBITDA totaled HK$13.2 billion or an increase of 5% was noticed.
Representatives of the company, which is one of the leaders on the Asian gambling market and in Macau in particular, defined last year as a really challenging one.
They determined the performance of Galaxy Macau as “resilient”. The revenue increased by 18% YOY. As for the adjusted EBITDA, it jumped by 12% to amount to HK$9.9 billion.
The situation with the StarWorld Macau is much more complicated, though. The venue saw a decline in full-year revenue and adjusted EBITDA and the main reason for the downfall was the problematic revenue, generated during Q4 of 2014. The full-year revenue decrease was reported to be HK$22.6 billion and the adjusted EBITDA reached HK$3.5 billion. In other words, the decrease was 4% and 6%, respectively.
Meanwhile, it was confirmed that the second phase of Galaxy Macau and Broadway will accept the first visitors towards the end of May. By offering the new facilities, Galaxy officials hope that they will lure more Chinese customers.
