'Lucky' dividend as Galaxy swings to $1.3b profit

Galaxy Entertainment (0027) swung to a net profit of HK$1.33 billion last year on the back of an improvement in tourist numbers, compared to a loss of HK$3.97 billion a year earlier.

The casino operator declared a special dividend and said it hopes to increase dividend payout while rolling out more new facilities,.

Revenue increased 53 percent to HK$19.7 billion, mainly due to the 51 percent growth to HK$17.3 billion from the gaming business.

The company also announced a special dividend of HK$0.3 per share.

"The dividend is small, just to bring luck to the market," said Galaxy's chairman Lui Che-woo. "I also hope that we can deliver more dividends after making a profit from the new projects."

Galaxy's shares jumped 4 percent on the news to HK$48.10 before closing at HK$47.50 .

In 2021, the number of mainland visitors to Macau jumped 48 percent year-on-year to 7 million, taking up 90.9 percent of total 7.7 million tourists to the city.

In the fourth quarter, VIP's gross gaming revenue slumped 57 percent year-on-year to HK$713 million because VIP gaming operations were suspended as regulation tightened in this quarter. The company said it has completely stopped VIP operations and cooperation with middle-men.

Macau's gross gaming revenue declined 13 percent year-on-year to HK$18.5 billion for the last three months of 2021, but rose 44 percent for the whole year to HK$84.3 billion, according to Macau's gaming industry regulator.

Licenses for Macau's six casino operators expire this June and Galaxy said it believes bid will be available in the second half of 2022 and that it was told by the government that a delay is also possible.

The company said revenue over the Chinese New Year was less than expected, mainly due to the fresh Covid-19 outbreak in Hong Kong and tighter restrictions imposed by the Macau government.

In terms of recovery, Lui expects cross-border restrictions with mainland China could be eased in three to six months with help of vaccines and drugs that treat Covid, despite regional outbreaks.

Galaxy's Cotai Phase 3 has completed construction and together with Phase 4 will focus on primarily non-gaming businesses like meetings, conferences and exhibitions as well as entertainment.