GALAXY 4Q CONF CALL NOTES
PREPARED REMARKS AND Q&A
- Infrastructure projects will drive visitation in 2012
- Sees significant Galaxy Macau margin upside in 2012
- Still at the beginning of their era in Macau
- Galaxy Macau premium mass/mass business continues to ramp up
- Galaxy Macau VIP also ramping up; will take 12-18 months to optimize
- Reinvesting back into company is better use of funds right now. e.g. 86% ROI at StarWorld
- About $100-120MM related to higher than normal hold
- Remaining capex for Galaxy Macau: $2.4 BN
- Galaxy Macau: grind and premium mass segments doing well
- Galaxy Macau Mass is the main focus
- Next week will open Pavilion Club; will open new high-limit mass tables
- $1.2BN cash due to proceeds from RMB bond offering (Balance Sheet: Other Cash Equivalents line)
- Effective in 2012, interest expense will be reduced due to a change in financing of a City Clubs loan
- Wages increasing 5-6% in 2012
- Everyone benefited when Galaxy Macau opened
HIGHLIGHTS FROM RELEASE
- Q4 Group adjusted EBITDA: HK$2.1BN
- StarWorld Q4 adjusted EBITDA: HK$827MM
- Galaxy World Q4 adjusted EBITDA: HK$1.2 BN
- Cash at end of 2011: HK$7.7BN (HK$2 BN restricted cash)
- 2011 non-recurring items 2011: Galaxy Macau pre-opening expenses: HK$0.8BN; charges from the change in fair value of the derivative under the convertible notes of HK$0.2BN and net loss on buyback of guaranteed notes of HK$0.1BN.
- 4Q Galaxy Macau
- VIP turnover: HK$167 BN
- VIP win: HK$5.5 BN
- VIP hold: 3.3%
- Mass drop: HK$5.7 BN
- Mass win: HK$1.4 BN
- Mass hold: 24.1%
- Slot handle: HK$4.3 BN
- Slot win: HK$269MM
- Slot hold: 6.3%
- 4Q StarWorld
- VIP turnover: HK$175 BN
- VIP win: HK$5.4 BN
- VIP hold: 3.1%
- Mass drop: HK$2.3 BN
- Mass win: HK$0.5 BN
- Mass hold: 20.9%
- Slot handle: HK$1.038 BN
- Slot win: HK$64 MM
- Slot hold: 6.1%
- Debt: HK$11.672 BN
