CC NOTES
-
Group Rev of $12.3 billion, up 5% QoQ but down 29% YoY
-
Adj EBITDA of $2.1 billion, UP 13% QoQ but down 36% YoY
-
Galaxy Macau
- Adjusted EBITDA of $1.7 billion, down 30% YoY, up 19% QoQ
- Played unlucky in Q3 which reduced Adjusted EBITDA by approximately $117 million
- Hotel occupancy across the five hotels was 99%, Non-gaming revenue of $742 million, up 92% YoY and 60% QoQ
- VIP Win % = 3.6% in Q3 2015 vs 3.2% in Q3 2014
- Mass Hold % = 43% in Q3 2015 vs 44.9% in Q3 2014
- StarWorld
- Adjusted EBITDA of HK$514 million, down 43% YoY, up 1% QoQ
- Played unlucky in Q3 which reduced Adjusted EBITDA by approximately HK$11 million
- Hotel occupancy was 99%
- VIP Win % = 2.7% in Q3 2015 vs 2.9% in Q3 2014
- Mass Hold % = 40.3% in Q3 2015 vs 41.4% in Q3 2014
- Broadway
- Virtually broke even with Adjusted EBITDA of HK$(1) million
- Played unlucky in Q3 which reduced Adjusted EBITDA by approximately HK$3 million
- Hotel occupancy was 99%
- Mass Hold % = 25.1% in Q3 2015 vs 20.7% in Q2 2015
-
Development cost savings of HK$400-HK$500 for Phase 2
-
Issuing a special dividend of HK$0.14 per share
-
Mass and non gaming - growing relative to VIP, despite still being the market leader in VIP
-
Will be realizing a HK$800 million cost savings program, and so far is on pace to deliver this initiative.
-
Cost savings program was previously underway, but are just now quantifying the program.
-
Hotel OCC continues to grow. Up to 99% from 96% over the same period last year
-
Bad luck hurt virtually all properties, luck on mass side was slightly better than the prior year period
-
Starworld Mass business growing very nicely
-
Phase 2 Update - Invested a total of $15.7 billion thus far on the project
-
Finished their strategic investment in Monaco's SBM (casino monopoly in Monte Carlo)
-
They remain cautiously optimistic regarding the future of Macau
-
Cite that a growing consumer in China will aid the growth of Macau
-
Anticipate to re-capture lost players when growth resumes
-
Flexible balance sheet is a huge positive going forward and will allow Galaxy additional opportunities
q/a
- Cost savings? Where will the costs be taking out?
- HK$800 million in savings and they have done about 35% of that thus far. Should be a 12-18 month program.
- Labor, marketing, and procurement will take up the largest share of the savings
- Shuffling around their human resources more effectively
- Looking into strategic marketing initiatives - wouldn't specify
- China/Macau Government comments
- Confident in the government's ability to support the industry and economy. See their willingness to work with the operators. Recent steps are a real positive
- Constantly looking to re-allocate their tables to Mass and premium Mass
- Revenue mix is really beginning to shift from VIP to mass, non gaming and slots. Represents roughly 50% of revenue now
- Cited strong Golden Week as a positive sign for the future.
- Opening of Horizon their premium mass offering has been very successful and will look to continue to use that as a future driver
- Table allocations. Awarded another 100 tables?
- They are in further talks with the government, but haven't received confirmation for the additional tables
- Tables are reportedly under utilized, how will they help?
- Would offer flexibility to allocate more tables to effective areas of the casino.
- It is also another sign of support from the government
- Will apply the tables to their highest and best use, (likely to premium mass segment)
- Couldn't comment on Phase 2's specific contribution to EBITDA but said it was very accretive
- Non Gaming was so strong due to Phase 2 and they are very pleased with this segment.
- Non Gaming Margin = Very high (wouldn't give exact numbers)
- SSS growth looking strong in their retail segment.
- 60k foot traffic per day for phase 2 was the whisper number, is that still holding?
- Still north of 60k per day, but they are also attracting better customers and Horizon will continue to drive that number higher
- Phase 3 or 4 changes to CAPEX?
- Studying diligently, focusing on consumer and forecasting where the consumer will be.
- CAPEX allocation is subject to change but for now, they haven't made changes
- Retail area not open until end of july, should we see more of an uptick since they weren't open for the full Q?
- Yes, expect to open more stores which will add to the non gaming number.
- They are very bullish on the potential of their retail segment
