HK-listed Galaxy Entertainment Group posted better-than-expected results for the full-year 2016, with full year net profit up 51 percent year-on-year to HK$6.3 billion (US$811.7 million).
Full year group revenue increased 4 percent year-on-year to HK$52.8 billion, while adjusted EBITDA increased 18 percent year-on-year to HK$10.3 billion.
Galaxy Macau was the primary contributor to group profits, generating revenue of HK$38 billion and adjusted EBITDA of HK$2.2 billion in 2016.
"We believe the company has hit all the right notes as it has not only reconfigured the gaming floors, but also when contemplating a major revamp of F&B particularly at Galaxy Macau," noted Union Gaming on Wednesday.
StarWorld achieved revenue of $11.8 billion and adjusted EBITDA of $2.2 billion in 2016, while Broadway Macau posted revenue of HK$676 million, and adjusted EBITDA of HK$30 million.
"While reported Q4 results were much better than expected, results were somewhat less impressive adjusted for hold (but still positive). The company could continue to gain traction in Q1 and potentially Q2 if it gains from a strong VIP market. However, the most important metric to watch will be Mass performance at GM and StarWorld," said Bernstein in a note on Wednesday.
Bernstein also notes that Galaxy remains interested in Japan, highlighting K. Wah and Lui family business relationships with Japanese companies over the past 50 years.
The company has declared a special dividend of HK$0.26 per share, totalling around HK$1.1 billion, to be paid around April 28, 2017.
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