Galaxy shines from high-stakes play

Macau casino operator Galaxy Entertainment posted a 29 per cent increase in first-quarter earnings and said it was seeing signs of improved demand from high-stakes gamblers.

Adjusted earnings before interest, taxes, depreciation and amortisation for the quarter to March rose to HK$2.77 billion from HK$2.15 billion a year ago, Galaxy said in a statement. The median estimate of six analysts was HK$2.79 billion.

A rise in new attractions, hotel supply and an improved rail connection are drawing more mainland visitors to Macau, the world's biggest gaming hub.

Galaxy is expanding in the city's Cotai area to compete with rivals including Sands China, where first-quarter profit jumped 63 per cent.

"There have been positive signs that demand in the VIP segment is regaining momentum," Galaxy said, referring to the high-stakes gamblers who provide most of Macau's revenue. VIP gamblers curbed spending last year as the mainland's economy weakened.

Revenue climbed 15 per cent to HK$15.2 billion. Turnover for VIP gambling fell 2 per cent at the Galaxy Macau and 15 per cent at Starworld Hotel & Casino.

Galaxy said last week it would pay HK$3.25 billion for Grand Waldo, which includes a spa, casino and hotel, to increase its footprint on Cotai. It is also investing as much as HK$66 billion to build the second and third phases of Galaxy Macau, its flagship casino resort in Cotai that opened in May 2011.