* Galaxy full-year profit jumps 51 pct
* Revenue edges up 3.6 pct to HK$52.8 bln
* Company expects recovery trend to continue
By Anne Marie Roantree
HONG KONG, Feb 28 Macau casino operator Galaxy
Entertainment Group posted a better-than-expected 51
percent rise 2016 net profit, thanks to a recovery in the
world's biggest gambling hub, and forecast double-digit gaming
revenue growth for this year.
Galaxy, one of six listed casino operators in the Chinese
territory of Macau, had been hit by sagging demand from high
roller Chinese gamblers for more than two years due to a
crackdown on corruption and slowing economic growth.
The former Portuguese colony, now a special administrative
region belonging to China, is the only place in the country
where citizens are legally allowed to gamble.
For the full year, Galaxy reported on Tuesday a net profit
of HK$6.28 billion ($809 million), up from HK$4.16 billion in
2015. That compared with an average forecast of HK$5.96 billion
from 19 analysts polled by Reuters.
Full-year revenue amounted to HK$52.8 billion, up slightly
from HK$51 billion a year earlier as the casino market
experienced a shift in the mix of gaming revenue from VIP to the
mass market, the company said in a statement.
"We were encouraged by the last five months of 2016, where
Macau experienced modest growth in gross gaming revenue (GGR).
We hope that this will develop into a definitive trend over the
course of 2017 and beyond," it said in the statement to the Hong
Kong stock exchange.
Deputy chairman Francis Lui said at an earnings press
conference after the results that the company expected to post
double digit growth in Macau gaming revenue in 2017.
Galaxy chief financial officer Robert Drake, also speaking
at the earnings conference, said the company would continue to
explore opportunities overseas, including in Japan.
Multi-billion dollar casino openings by Sands China Ltd
and Wynn Macau Ltd had helped attract VIP
customers whose numbers have dwindled since the start of 2014
when the government began a campaign against shows of wealth by
The campaign and a slowing Chinese economy drove gambling
revenue down in Macau for a third year in a row in 2016.
In January, gambling revenue rose 3.1 percent to 19.3
billion patacas ($2.4 billion), getting a boost from a national
holiday at the end of that month.
Hong Kong-listed Galaxy said that for the first time in 10
years, overnight visitors to Macau had exceeded same-day visitor
arrivals thanks to new hotel capacity.
Galaxy has the biggest land plot on Macau's Las Vegas style
Cotai strip where the $4 billion Wynn Palace and $3 billion
Parisian property opened in the third quarter.
Galaxy still has around half of its land area to build out
on Cotai and has said it will expand non-gaming facilities in
the neighbouring island of Hengqin.
Non gaming has emerged as a bigger priority for the multi
billion operators as gaming revenues have declined and
authorities try to wean the southern Chinese territory away from
the casino industry towards more family friendly wholesome
Shares of Galaxy closed up 0.3 percent ahead of the earnings
announcement on Tuesday, beating a 0.8 percent rise for the
benchmark Hang Seng Index.
($1 = 7.7628 Hong Kong dollars)
(Additional reporting by Donny Kwok; Editing by Muralikumar