The Hong Kong-listed gaming conglomerate posted a net loss of HK$1.53 billion for the year ended December 31, 2006, compared with a net profit of HK$2.4 billion a year earlier.

The net loss was 65 percent greater than an average HK$926.2 million that 10 analysts polled by Thomson Financial had projected.

Earnings were largely dragged down by the HK$998 million amortization charges arising from the gaming license Galaxy acquired in 2005, HK$522 million in finance charges and HK$268 million incurred in the pre- opening of four casinos, chief financial officer Nigel Morrison said.

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He said earnings before interest, tax, depreciation and amortization, or Ebitda, excluding non-recurring items last year would be HK$437 million, nearly double that in 2005, and exceeding expectations.

"The result this year will be significantly better," said Morrison, adding that 2007 will be the first full year of operation for its flagship project - Star World Hotel and Casino and all of the City Club casinos.

Turnover was HK$4.67 billion, more than triple the HK$1.29 billion in 2005. Galaxy did not declare a final dividend.

In the fourth quarter last year, Galaxy's market share in terms of revenue was 18 percent, compared with 7percent in the first quarter. In the first three months this year, it pulled in HK$3.7 billion of Macau gaming revenue, with more than HK$100 billion in VIP rolling turnover, which helped it achieve a 22 percent market share.

Rolling turnover is related to credit extended to high rollers.

Chairman Lui Che-woo believes Galaxy can hold on to its market share despite the many new entrants.

In the first three months, Macau's gaming revenue surged 44 percent year on year to 18.1 billion patacas (HK$18.3 billion) compared with 12.6 billion patacas, in the same period last year, according to figures released Wednesday by Macau's Gaming Inspection and Coordination Bureau. Macau has overtaken the Las Vegas Strip, raking in 56.2 billion patacas last year, while Las Vegas generated US$6.6 billion (HK$51.48 billion).

JPMorgan said earlier that Galaxy's share price had been hurt by placement overhang in the short-term, but believes its land, which is the largest single piece of undeveloped site in Macau, could add HK$15 per share to the stock in the next five years when the landbank is converted into income-producing property. It keeps an "overweight" rating on Galaxy.

Galaxy operates five casinos in the former Portuguese enclave, with the sixth one - Cotai Mega Resort - still in the pipeline. The first phase of the resort project, costing HK$6 billion, is expected to be topped out next month and is scheduled to open by end 2008, Morrison said.

The initial phase will offer 600 gaming tables and 1,000 slot machines, as well as a 27-story hotel with 1,500 rooms.

"We have over HK$6 billion in cash and significant cash flows from StarWorld," Lui said, adding that the capital will be sufficient to finance development and open the first phase of the Cotai Mega Resort.

Galaxy shares climbed 0.51 percent to close Wednesday at HK$7.90.