Executives at Macau casino operator Galaxy Entertainment Group said player reinvestment in the Macau market had “up” while “currently stabilising,” particularly at the top of the premium mass segment.
Casino company executives made the comments during a conference call with investment analysts, according to a note from Seaport Research Partners on Thursday.
On Thursday, Galaxy Entertainment reported second-quarter earnings before interest, taxation, depreciation and amortization (EBITDA) of HK$3.18 billion, up 11.6% sequentially.
“Galaxy has ramped up player reinvestment in bulk – we estimate at 150 basis points – but this has resulted in significant stock gains and corresponding EBITDA gains,” Seport analyst Vitaly Umansky said in a recent note for the company.
Galaxy Entertainment’s main gaming operations are the Galaxy Macau in Kotai and the Starworld Hotel in Macau Peninsula. 토토사이트 추천
In its own note, JPMorgan Securities (Asia-Pacific) said Galaxy Entertainment’s cost management results were “somewhat mixed” in the three months to June 30.
Analysts DS Kim, Mufan Shi and Selina Li said the company’s “solid” operating spending controls, which are “down 3% to 4% quarter-on-quarter,” were “offered by an increase in reinvestment,” according to JP Morgan estimates.
“However, this in itself is not too worrying given the overall stable competition/promotion environment as a result of the second quarter as confirmed so far, and that Galaxy has gained share on the back of these expenditures,” they added
Competition among Macau operators is increasing, with companies spending more on promotional and reinvestment activities, especially for customers in the premium mass sector, according to industry commentators.
Executives at market rival Melco Resorts & Entertainment said earlier this week that player reinvestment had not accelerated in April-June, though they noted it had “remained high through the second quarter” despite Macau’s “very competitive environment.”
“We’re probably in an uptrend in the history of the market and will eventually unwind and come down,” Evan Winkler, president of Melco Resorts, said in the company’s second-quarter earnings call.
“We don’t necessarily see a significant drop in the short term, but we don’t see it rising,” he added.
On Thursday, Galaxy Entertainment’s executives were also quoted as saying that the ongoing crackdown on financial misconduct in Macau “has no real impact on the business.”
“Most players have access to liquidity and revenue should not be affected by government plans related to this activity,” Seaport said, citing executives at the casino operator.
Macau aims to criminalize unlicensed exchange inside casinos for gambling purposes.