Galaxy Entertainment Group, second quarter and first half of 2019 results

Galaxy Entertainment Group Limited. Galaxy Entertainment Group, second quarter and first half of 2019 results ……………………………………………………………………………………………
[August 13, 2019, Tokyo]
-Galaxy Entertainment Group (abbreviation: GEG, Hong Kong Stock Exchange Securities Code: 27) today, 3 months and 6 months until June 30, 2019 Announced the results of Group adjusted EBITDA for the second quarter of 2019 is HK $ 4.3 billion 9% increase compared to the previous quarter, flat year on year Sustained growth through 3rd and 4th phase development projects and Japan’s development plan Announced that a special dividend of HK $ 0.46 per share will continue to be paid around October 25, 2019. Highlights of second quarter and half year results for 2019 * GEG: Mass gaming is steady, but VIP segment revenue declines First half group net sales of HK $ 26.2 billion (down 7% year-on-year) First-half group adjusted EBITDA of HK $ 8.3 billion (down 4% year-on-year) Net income attributable to shareholders (“NPAS”) in the first half of the year was HK $ 6.7 billion (down 7% year-on-year) Group net sales in the second quarter were HK $ 13.2 billion (down 5% year on year, up 1% year on year) Group adjusted EBITDA for the second quarter was HK $ 4.3 billion, flat compared to the same period last year and up 9% from the previous quarter Adjusted EBITDA in the second quarter increased by approximately HK $ 349 million due to positive factors, and leveled EBITDA increased by HK $ 4 billion (down 11% year on year, up 3% year on year) Adjusted EBITDA for the last 12 months is HK $ 16.5 billion (up 1% year-on-year) Galaxy Macao: Mass gaming is steady, and the facility expansion plan is on track First half net sales of HK $ 18.8 billion (down 5% year-on-year) Adjusted EBITDA for the first half was HK $ 6.3 billion (down 3% year-on-year) Net sales in the second quarter were HK $ 9.5 billion (down 4% year on year, up 3% year on year) Adjusted EBITDA in the second quarter was HK $ 3.2 billion (same level year on year, up 7% year on year) Adjusted EBITDA in the second quarter increased by approximately HK $ 253 million due to positive factors, and leveled EBITDA adjusted to HK $ 3 billion (down 11% year-on-year, flat compared to the previous quarter) The occupancy rate for the five hotels in the second quarter is virtually 100%. Starworld Macau: Mass gaming is steady and facility expansion plans are on track First half net sales of HK $ 5.7 billion (down 8% year-on-year) Adjusted EBITDA for the first half was HK $ 1.9 billion (down 5% year-on-year) Net sales for the second quarter were HK $ 2.8 billion (down 10% year-on-year, down 8% year-on-year) Adjusted EBITDA in the second quarter was HK $ 943 million (down 4% year on year, down 1% year on year) Adjusted EBITDA in the second quarter increased by approximately HK $ 92 million due to positive factors, and leveled EBITDA adjusted to HK $ 851 million (down 14% year on year, down 3% year on year) Hotel occupancy rate in the second quarter is virtually 100% Broadway Macau: A unique family resort, powerful support from small and medium-sized businesses in Macau Net sales for the first half were HK $ 298 million (HK $ 273 million for the first half of 2018) Adjusted EBITDA for the first half of the year was HK $ 21 million (1H2018: HK $ 15 million) Net sales in the second quarter were HK $ 147 million (HK $ 131 million in the second quarter of 2018 and HK $ 151 million in the first quarter of 2019) Adjusted EBITDA in the second quarter is HK $ 6 million (HK $ 2 million in the second quarter of 2018, HK $ 15 million in the first quarter of 2019) Adjusted EBITDA in the second quarter increased by approximately HK $ 4 million due to positive factors, leveled EBITDA adjusted to HK $ 2 million (HK $ 4 million in Q2 2018, HK $ 11 million in Q1 2019) Hotel occupancy rate in the second quarter is virtually 100% Balance sheet: Healthy and fluid balance sheet Cash and liquid investments are HK $ 50.4 billion, net cash is HK $ 43.9 billion as of June 30, 2019 Debt at HK $ 6.5 billion at 30 June 2019 (mainly related to current financial revenue management program) Announced a special dividend of HK $ 0.45 per share on April 26, 2019 Announced to continue paying a special dividend of HK $ 0.46 per share around October 25, 2019 Latest information on development: continuing to explore development opportunities Despite some inconveniences in the short term, we will continue to refurbish HK $ 1.5 billion for the already announced Galaxy Macau and Starworld Macau Development of the 3rd and 4th phases of the Cotai area Galaxy Macao is ongoing, including non-gaming MICE, entertainment and family facilities, including gaming Yokokotojima-Updating lifestyle resort plans to complement Macau, Macau’s flagship entertainment resort Expand international business-continue to explore opportunities in overseas markets, including Japan Dr. Louis Che Wu, President of GEG, said: “Today, we are happy to report on the Group’s second quarter and first half of 2019. This year is an important year for China and Macau, in addition to the 70th anniversary of the founding of the People’s Republic of China and the 20th anniversary of the return of Macau, 12 days later On August 25, three major events, especially the next Macau administrative chief election, are of particular interest. Group-wide net sales for the first half of 2019 declined 7% year-on-year to HK $ 26.2 billion, and adjusted EBITDA declined 4% year-on-year to HK $ 8.3 billion. Group-wide adjusted EBITDA for the second quarter of 2019 increased by 9% to HK $ 4.3 billion. Our balance sheet continues to be sound with sufficient total cash, with liquid investments of HK $ 50.4 billion and net cash of HK $ 43.9 billion. The cash flow generated by the balance sheet and business operations makes it possible to return dividends to shareholders, invest funds in the development pipeline, and promote international business development plans. On April 26 this year, we paid a special dividend of HK $ 0.45 per share. We are also pleased to announce that a special dividend of HK $ 0.46 per share will be available around October 25, 2019. These dividends are evidence of confidence in Macau and our long-term outlook. The Macau market as a whole is relatively stable, despite regional competition intensifying, ongoing trade friction, and a decline in VIP due to the slowdown of the Chinese economy. We will reallocate resources to the largest and best use and focus on the growth of mass profitable business with higher profit margin. The already announced HK $ 1.5 billion expansion plan is proceeding smoothly. We believe this plan will help maintain the attractiveness and competitiveness of Galaxy Macau and Starworld Macau. In the short term, it may be inconvenient for some customers, but in the medium term, it may lead to the creation of shareholder value. In addition, we will continue to develop the third and fourth phases of Galaxy Macao in the Cotai region, and we will review the international business development plan on a case-by-case basis. In Japan, we are continuing to strengthen our relationship with the community, and recent activities include the sponsor of EUROJAPAN CUP 2019 and the Japan-Macau integrated resort management mentorship program in cooperation with Macau University and Toyo University. There is. In the medium to long term, we believe that improving the living standards of the middle class in mainland China will lead to increased demand for tourism, entertainment and travel, and we are confident in the prospects for Macau. I am delighted that the Minato Pearl Bridge was opened. We are looking forward to the improvement of access to Cotai by the extension of the Gwangju Intercity Railway to Yokokindo. I believe that the opening of infrastructure that will make it easier to access Macau and the implementation of the Greater Bay Area integration plan will facilitate the flow of people, goods and capital in Macau, Hong Kong and nine cities in southern Guangdong. Are thinking. We are fully aware that international trade discussions are ongoing and that in the short term this may affect consumer sentiment and behavior. We will continue to focus on supporting the Macau government’s vision of becoming a “world tourism and leisure center”. Last but not least, I would like to thank all of our staff for providing “world-class Asian hospitality” services and contributing to the success of the group. ” Market overview According to a report from DICJ (Macau Expo Coordination Bureau), Macau’s gross gaming revenue (GGR) in the first half of 2019 was HK $ 145.1 billion (down 0.5% year-on-year). GGR for the second quarter of 2019 was HK $ 71.2 billion (down 1% year-on-year and 4% year-on-year). In the first half of 2019, the number of visitors to Macau was 20.3 million, an increase of 21% over the same period last year. Of these, the number of overnight guests increased 8% year-on-year, and the number of day-trip guests increased 34% year-on-year. The average length of stay for guests stayed unchanged at 2.2 days. The number of visitors from mainland China increased by 22% year-on-year to 14.3 million, indicating that the opening of the Minato Pearl Bridge and the high-speed railway led to an increase in the number of visitors to Macau. In the first half of 2019, there were several impacts on the market (particularly the VIP segment), including the introduction of smoking lounges in VIP rooms, the global economic slowdown, competition from new investments, and intensifying competition with local casinos. There was an event. In the long run, Macao’s VIP business will remain competitive. The introduction of the smoking lounge, which began on January 1, 2019, was well received by employees and guests. The installation of new smoking lounges throughout GEG’s resorts has changed the distribution of players within the facility. Congestion in certain areas has improved over the past, usage in other areas has increased, and the overall customer experience has improved. From April 2019, visa issuance to mainland Chinese residents has been eased, and it is now possible to apply for tourist visas to Macau at Immigration Centers throughout the country. At the same time, the Chinese State Council approved the construction plan for Yokokoto International Leisure Tourism Island. This plan could boost the development of the Greater Bay Area by boosting the collaboration between Guangdong, Macao and Hong Kong and promoting Macau’s economic diversity. GEG Financial Status: First Half of 2019 In the first half of 2019, the Group reported net sales of HK $ 26.2 billion (down 7% year-on-year) and adjusted EBITDA of HK $ 8.3 billion (down 4% year-on-year). Net income attributable to shareholders was HK $ 6.7 billion (down 7% year-on-year). Adjusted EBITDA for Galaxy Macao was HK $ 6.3 billion (down 3% year-on-year). Adjusted EBITDA for Starworld Macao was HK $ 1.9 billion (down 5% year-on-year). Adjusted EBITDA for Broadway Macao was HK $ 21 million (HK $ 15 million in the first half of 2018). In the first half of 2019, GEG’s adjusted EBITDA increased by approximately HK $ 460 million due to positive factors in the gaming business. EBITDA after leveling adjustments was HK $ 7.9 billion (down 11% year-on-year).

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