But that doesn't mean we can't speculate, estimate, and pontificate.
With the preliminary data we have, our best guess is that Galaxy Macau is on track for approximately $400-450MM of EBITDA in its first full year of operations. Given the cost, that level of EBITDA translates into a 20-23% ROI. Our calculation takes into account current revenue run rates adjusted for the “honeymoon” effect, high initial hold %, and market type margins on the property’s Mass and VIP revenues.
Galaxy Macau total gaming revenues for the first 16 days were around US$116MM ($112MM of which was table revenue).
- Mass table revenue of $19MM
- VIP table revenue of $93MM with RC volume of $2.3 BN
- Assuming no direct play, hold at Galaxy Macau was a high 4.0%
- Roughly $4-5MM of slot revenue
We estimate that a full month in May would have generated between $163-170MM, assuming normal hold for the entire month. We assume a full month of May would have generated:
- $35MM of Mass win
- $8-10MM of slot win
- Approximately $4.4BN of RC volume and $125MM of Gross VIP win
COMPS
As a point of reference, we thought it would be helpful to compare Galaxy’s opening with some recent openings (City of Dreams, Venetian, and MGM Macau). The Galaxy opening was considerably stronger than CoD or MGM and even matches up to the Venetian.
- CoD opened on June 1st 2009 and produced a paltry $28MM of gross gaming revenues for their entire first month. Granted hold was very low, but Junket Rolling Chip was only $1.6BN. In July 2009 (its 2nd month), CoD did approximately $130MM of revenues on Junket RC volume of $2.36BN. For its first full 4 quarters of operations, CoD generated $183MM of EBITDA. All-in cost for the property was $2.1 BN (1st year ROI of 9%).
- Venetian opened in late August 2007. In September 2007, the property did about $145MM of gross gaming revenues on junket RC volume of $3.9BN. Venetian generated $500MM of EBITDA in its first twelve months of operations for a 1st year ROI of 20%.
- MGM Macau opened on December 18, 2007. We estimate that the first partial month of operations produced just $17MM of GGR. MGM’s first full month of operations wasn’t very inspiring either, with GGR of just $93MM on junket RC of $1.8BN. MGM Macau generated less than $120MM of EBITDA in their first full twelve months of operations for a ROI of just 10%.
