Goldman Sachs maintains positive outlook for Galaxy amid Q4 headwinds

Analysts at Goldman Sachs expect the introduction of a “40-table” premium mass gambling area at the Southside of Galaxy Macau to contribute to the casino operator’s growth in the coming months.

Macau.- A recent report by investment broker Goldman Sachs has stated Galaxy Entertainment Group (GEG) is expected to maintain a positive growth outlook for its business in 2024, despite the possibility of unsatisfactory financial results for the fourth quarter of 2023. 

Analysts noted that GEG had continued to see healthy property visitation and underlying gaming volume in recent months. However, the fourth quarter results could be impacted by bad luck in both VIP and mass-market segments, as well as higher costs incurred due to the opening of the Andaz hotel last September and sponsorship events.

Galaxy’s fourth-quarter EBITDA is expected to remain steady quarter-to-quarter at HK$2.8bn (US$358m) to HK$2.9bn (US$371m), while gross gaming revenue (GGR) market share is likely to decline from the 18.5 per cent reported in the third quarter to 17.1 per cent.

GEG posted net revenue of HK$9.7bn (US$1.24bn) for the third quarter. The figure was up by 11.4 per cent sequentially and 374.4 per cent from the prior-year period.

The report also disclosed positive news about the casino operator, highlighting the management team’s positive outlook for 2024 based on several indicators, including a noticeable recovery in mass GGR, strong hotel room bookings for the upcoming Chinese New Year holidays, and the renovations of gaming floors.

Galaxy Macau’s recent addition of a 40-table premium mass area at the Southside in mid-December, along with the scheduled completion of gaming floor renovations by Chinese New Year, are also expected to contribute to GGR growth.

Furthermore, the Starworld hotel is currently undergoing a revamp, which involves closing down non-performing tables and relocating them to Galaxy Macau. 

Additionally, stadium games or electronic table games are being introduced to the gaming floor. It was also revealed that this year, GEG intends to change the façade of the building and add non-gaming facilities.

Last November, the company’s chief operating officer Kevin Kelley said the operator will host 50 major concerts and 250 MICE (meetings, incentives, conferences, and exhibitions) events in 2024.