Galaxy recorded HK$8.7bn (£873.1m/ €1.02bn/ $1.11bn) in revenue in Q2, a 257% rise from the HK$2.4bn the operator reported in the same period the previous year. On a sequential basis, this represents a 23% rise.
However, the revenue results remain 33.1% below the HK$13.0bn the business announced in Q4 2019, the last quarter unaffected by the Covid-19 pandemic.
Relaxing of Covid-19 travel restrictions drives recovery
The relaxing of Covid-19 related entry restrictions and quarantine rules largely drove the recovery in Galaxy’s revenue during the three-month-period.
Galaxy founder and chairman Dr. Lui Che Woo highlighted the business’ non-gaming initiatives as the focus for future efforts.
“During the period Macau continued its business recovery and the group’s primary focus was on operational execution, recruitment and project development.
“We believe that non-gaming is the future of Macau to drive a longer staying and more diverse visitor base which aligns with Macau Government’s vision of building Macau into a world center of tourism and leisure,” said the chairman.
Galaxy’s results for the six-month period highlight the company’s accelerated revenue in Q2. The business posted HK$15.7bn, up 140.9% from the HK$6.5bn reported in H1 2022.
“Our vote of confidence in Macau is demonstrated by the fact that [Galaxy] is the first Macau concessionaire to resume dividends and return capital to shareholders after the border reopened,” he added.
Strong balance sheet leads to dividend
Galaxy highlighted its balance sheet in its Q2 report. While many of the business’ competitors took on significant debt during the pause on their Macau operators, its debt stands at HK$2.4bn.
This is a significantly smaller number than its cash and liquid investments, which were $24.4bn as of 30 June 2023.
The company pointed to its healthy balance sheet, as well as substantial cash flow from its operations as the reason it is returning cash to shareholders.
The business announced a special dividend of $0.20 share is to be paid to shareholders on 27 October 2023.
Restarted operations brings increased costs
The resumption of the company’s Macau operations saw the business report a significant increase in costs during the period.
Costs related to Macau gaming taxes rose to HK$5.5bn from the HK$1.9bn reported in the same period the previous year.
Meanwhile expenses associated with raw materials and consumables, as well as employee salaries also jumped during the period to HK$702.4m and HK$3.48bn respectively.
The company’s other operating expenses also saw a significant increase, rising 67.7% to HK$2.1bn. This trend was also seen with Galaxy’s financial costs, which rose to HK$122.9m from the HK$42.0m reported in 2022.
Galaxy gets into the black in Q2
Despite the increased costs Galaxy reported a pre-tax profit of HK$2.94bn in Q2 2023, compared last year’s HK$802m loss.
Overall, the company’s earnings before interest, taxes, depreciation or amortisation (EBITDA) stood a5 HK2.5bn. This is opposed to 2022’s HK$384m EBITDA loss.
Following the impact of a HK$46.9m tax bill, which was largely stable on last year’s total, the company posted a HK$2.88bn total profit for the period.
Original article: https://igamingbusiness.com/finance/quarterly-results/galaxy-q2-dividend/
