Special dividend declared as Galaxy revenue triples

June Chen

Hospitality and gaming company Galaxy Entertainment (0027) swung to a net profit of HK$6.83 billion in 2023 with a special dividend of HK$0.3 declared, thanks to China's reopening borders and visitor arrivals to Macau jumping by 395 percent compared to 2022, according to the Gaming Inspection and Coordination Bureau.

However, shares of Galaxy dropped 2.32 percent to HK$42.05 as J P Morgan and Citi worried about the company's loss of market share.

The group posted revenue of HK$35.7 billion, an increase of 211 percent year-on-year. As the first Macau concessionaire to resume dividends after the border reopened, the company paid a special dividend of HK$0.20 per share last October and a new special dividend of HK$0.3 to be paid on or about 26 April.

Galaxy Macau, the company's principal subsidiary, is the primary contributor to group revenue and earnings, whose adjusted EBITDA was HK$9.1 billion, versus HK$295 million in 2022. The casino played unlucky in its gaming operations, which decreased its adjusted EBITDA by approximately HK$162 million.

Revenue from hotels, mall operations, and others, including rental income, amounted to approximately HK$1.61 billion, which increased from HK$1.11 billion in 2022.

Macau's gross gaming revenue for 2023 exceeded 1.80 trillion patacas (HK$1.75 trillion), up 334 percent year-on-year, according to Gaming Inspection and Coordination Bureau reporting. The number of mainland, Hong Kong, and international visitors in 2023 returned to 68 percent, 98 percent and 48 percent of the corresponding levels of pre-Covid.

The group holds an optimistic forecast for future years amid the government's announcement to spend an estimated 235 million patacas this year to attract international visitors to Macau by actively promoting the SAR in overseas destinations and subsidizing airline tickets to Macau.

The company's phase 4 project, which focuses on non-gaming, targeting entertainment and family facilities, is planned to open in 2027.