Galaxy could see non-gaming revenue recover faster than GGR

Analysts at Sanford C. Bernstein predict that the company’s non-gaming revenue could surpass pre-pandemic levels in 2023.

Macau.- Sanford C. Bernstein analysts Vitaly Umansky, Louis Li, and Shirley Yang have forecast that Galaxy Entertainment could see its non-gaming revenue recover to pre-pandemic levels more quickly than its gaming revenue.  

They believe that Galaxy Entertainment’s gaming revenue could get back to pre-pandemic levels in 2024, and rise to 118 per cent of 2019 levels by 2025, with the “vast majority” coming from the mass market. However, analysts believe non-gaming revenue could surpass pre-pandemic levels in 2023 and rise 55 per cent higher than 2019 levels in 2025.

Amid the current outbreak of Covid-19 cases, Galaxy Entertainment is the only gaming operator in Macau that has seen a strong rebound in its retail business. Analysts suggest that this could help hedge some of the risks of “a constrained core gaming business”.

The brokerage added that the HK$50bn (US$6.37bn) expansion of Galaxy Macau in Phases III and IV could generate “moderate incremental overall gaming expenditures by customers… but strongly enhance the leisure and entertainment offerings”.

For the first quarter of the year, the casino operator reported that revenue was down 20 per cent year-on-year to HK$4.1bn (US$520m). Net gaming revenue plunged 24.8 per cent to HK$2.90bn when compared to last year and 10.9 per cent sequentially.