Takeaway: 1Q 2015 EBITDA missed our estimate slightly. Mgmt sees some stabilization in mass.


  • 1Q 2015 had toughest comp
  • Seeing signs of gradual stabilization in the market but need more time to verify that
  • Galaxy Macau: Mass revenue grew 3% sequentially which is a good sign for Phase 2
  • StarWorld:  have reallocated tables to better use
  • 1Q capex: total $2.1 billion ; $340m (Broadway capex); completed Grand Waldo acquisition in 1Q.  Have hired 6,200 workers (have doubled staff). 
  • Increase in Debt to $2bn: due solely to a treasury management exercise where interest income on cash holdings exceeds corresponding borrowing cost

Q & A

  • Possibility of full smoking ban: GEG supports what Macau govt has done with smoking control act. Imposing additional restrictions through full smoking on a tough Macau environment would hurt.
  • Conflicting reports from media on visitation cap
  • Luck-adjusted EBITDA: $20m of bad luck in 1Q (Galaxy Macau: played unlucky in higher margin premium direct business -$65m; Starworld: benefited $45m)
  • Construction materials:  4Q is traditionally strongest in year. 1Q weakest.  Mainland China lagged lagged behind but HK did well.
  • Sees volume stabilization particularly in the mass segment (premium and core)
  • Pre-opening spend in 1Q: $185m; $400-425m YTD. Will hit that $19.6 bn target.
  • Lower hotel occupancy QoQ:  optimal yield doesn't necessarily mean 100% occupancy but April occupancy is running at full occupancy.
  • Chief Executive address: positive on growth of Macau 

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