Galaxy pre-tax earnings surge on StarWorld high-stakes strategy

Galaxy Entertainment Group, the Macau casino operator controlled by the family of property and construction tycoon Lui Che-woo, said pre-tax earnings rose to HK$1.1 billion in the first nine months, already 150 per cent more than last year's full-year results.

Galaxy's flagship StarWorld casino hotel, which opened in October last year, drove the increase. Group sales surged 105 per cent over the whole of last year to HK$9.57 billion in the nine months to September.

StarWorld's third-quarter results were dragged down by rising costs and fresh competition from Las Vegas Sands Corp's newly opened US$2.4 billion Venetian Macao and Melco PBL Entertainment's US$583.6 million Crown Macau, which opened fully in July.

Galaxy said earnings before interest, tax, depreciation and amortisation (ebitda) at the HK$3 billion, 500-room property fell 19.6 per cent to HK$294 million in the three months to September, down from HK$366 million the previous quarter.

Resort-wide revenues slipped 5 per cent to HK$2.09 billion, from HK$2.2 billion in the second quarter.

StarWorld accounted for 79 per cent of the group's HK$372 million in third-quarter ebitda and 65 per cent of turnover. The company's four franchised 'city club' casinos added HK$34 million in profit for the quarter on total gaming revenue of HK$1.6 billion. Galaxy's legacy construction materials unit, the group's core business prior to the 2005 acquisition of a Macau gaming licence, added HK$152 million ebitda on sales of HK$1.1 billion.