By Kate O’Keeffe
Of DOW JONES NEWSWIRES
HONG KONG (Dow Jones)–Galaxy Entertainment Group Ltd. (0027.HK) Wednesday reaffirmed its massive Cotai project is on schedule to open in the first quarter of 2011, and said its first-quarter earnings before interest, taxes, depreciation and amortization rose 79%, driven by better gaming volumes and cost controls at its StarWorld casino and hotel.
The Hong Kong-listed casino operator, controlled by the family of tycoon Lui Che Woo, was upbeat on the outlook for the remaining months of the year.
“Surprisingly the second quarter has posted a record performance for April and the outlook for the full year remains promising,” it said in a statement, adding the first quarter is historically strong because of the Lunar New Year holiday.
The group’s Ebitda for the three months ended March 31 rose to HK$417 million (US$53.5 million) from HK$233 million in the same period a year earlier, and was the sixth consecutive quarter of Ebitda growth. The company didn’t disclose its first-quarter net profit.
First-quarter revenue rose to HK$3.95 billion from HK$2.62 billion a year earlier, as gambling revenue in the Chinese territory continues to recover from last year’s low base.
Galaxy has said its project in Cotai, where operators are building enormous casino resorts, will have the capacity to host 600 gambling tables and 2,200 luxury hotel rooms, suites and villas in a 550,000 square meter facility.
A person familiar with the matter said earlier Galaxy would be given permission to put at least 400 new tables in the casino despite the Macau government’s cap on gambling tables.
The company said in April it had completed the long-awaited financing plan for the HK$14.1 billion Galaxy Macau project with a HK$9.0 billion loan from a consortium of Asian banks, removing a major uncertainty that analysts said had weighed on the company’s shares. Galaxy will close the deal for the loan in the “very, very near future” Chief Financial Officer Robert Drake told Dow Jones Newswires on Wednesday.
Despite the Macau government’s tough stance on foreign labor, potentially leading to higher construction costs in Macau, Drake said he was confident Galaxy will be able to keep construction costs within budget. Over 90% of the company’s contracts have already been awarded on a fixed price basis, said Peter Caveny, vice-president of Galaxy’s investor relations.
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