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Galaxy Entertainment Group Reports Q4 & Annual 2020 Results

·28-min read

Continue Working Closely With Macau Community to Control COVID-19

Q4 2020 Group Adjusted EBITDA Of $1.0 Billion Vs $(0.9) Billion Loss In Q3 2020

Continue Investing In Macau’s Economic Future By Upgrading Existing Properties & Progressing Phases 3 & 4 Remains Financially Healthy

Galaxy Entertainment Group ("GEG", "Company" or the "Group") (HKEx stock code: 27) today reported results for the three month and twelve month periods ended 31 December 2020. (All amounts are expressed in HKD unless otherwise stated)

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20210224006247/en/

Chart of GEG Full Year Adjusted EBITDA (Photo: Business Wire)

LETTER FROM THE CHAIRMAN OF GALAXY ENTERTAINMENT GROUP

I wish to take this opportunity to update you on the status of Macau and the performance of GEG in 2020. COVID-19 has continued to impact the community and businesses globally including Macau and GEG. In Q4 2020, Mainland China, Hong Kong and Macau continued to experience travel restrictions and social distancing measures as they continued to effectively contain the pandemic. Given the subdued revenue the Group’s Adjusted EBITDA was $1.0 billion for the fourth quarter. This represents a 207% improvement compared to the Adjusted EBITDA loss of $0.9 billion reported in Q3. This improvement was largely driven by an increase in visitation which translated into increased revenue and continuing cost control. The full year Adjusted EBITDA was $(1.0) billion versus $16.5 billion in 2019.

We again applaud the Macau Government for their proactive leadership during the challenging pandemic crisis. Their focus is not only to ensure the health and safety of the community, but also ensuring that Macau is well positioned to attract visitors, support economic recovery and maintain the social stability of Macau.

We continue to make good progress with our development projects including Cotai Phases 3 & 4. In the meanwhile, we renovate, reconfigure and introduce new products to our resorts. In addition, we remain engaged in our international expansion plans including Japan, which is also being impacted by the pandemic.

Due to our conservative financial management, the Group’s net cash as at year end provides us with valuable flexibility in managing our ongoing operations and allows us to continue with our longer term development plans.

In the Macau Policy Address for 2021, Chief Executive Mr. Ho Iat Seng stated that the Government will promote the stable and healthy development of the gaming industry, and to commence preparatory and preliminary work for the new gaming concessions. We are looking forward to the launching of the public consultation in the 2H 2021.

Upholding the philosophy of "what is taken from the community is to be used for the good of the community", we have been proactively supporting Macau and the Mainland during this epidemic. GEG has been working with the community to combat the outbreak through an array of practical initiatives, including: offering cash donations, donating hygiene & essential supplies, supporting local SMEs and providing timely assistance to numerous non-profit welfare and social service organizations and schools. In addition, GEG also adopted and supported all protective measures laid out by the Health Bureau of the Macau SAR Government and strengthened the epidemic prevention measures within our resorts.

In the medium to longer term, we have great confidence in the future of Macau. We have seen signs of early recovery post the reinstatement of the IVS in late September 2020 and it may take a few more quarters for business volumes to ramp up. However, we do acknowledge the ongoing difficulties associated with COVID-19 and potential future flare ups of COVID-19 could have a material adverse impact on our financial performance. Given the uncertainty caused by the COVID-19 pandemic, today the Board of Directors has decided not to declare a dividend.

We are pleased to hear that Macau and other locations are proceeding with their COVID-19 vaccination rollout plans. We believe that when Mainland and international tourists make future travel plans, health and safety will be foremost in their minds.

Finally, I would again like to acknowledge and thank the health and emergency personnel who have worked so hard to ensure the safety of Macau. I would also like to thank our staff, management team and Board of Directors who voluntarily contributed to the various cost savings programs and for being so supportive of our Company during this period of time. Thank you!

Dr. Lui Che Woo

GBM, MBE, JP, LLD, DSSc, DBA

Chairman

Q4 & FULL YEAR 2020 RESULTS HIGHLIGHTS

GEG: Well Capitalized to Weather the Storm

Galaxy Macau: Adjusting Operations to the Current Business Environment

StarWorld Macau: Adjusting Operations to the Current Business Environment

Broadway Macau™: A Unique Family Friendly Resort, Strongly Supported by Macau SMEs

Balance Sheet: Healthy and Liquid Balance Sheet

Development Update: Continuing to Pursue Development Opportunities

Macau Market Overview

With the outbreak of COVID-19, the Macau Government acted rapidly and decisively to control the pandemic. Basically for the whole year of 2020 Macau was impacted by COVID-19 and the associated travel restrictions. Based on DICJ reporting, Macau’s Gross Gaming Revenue ("GGR") for the full year 2020 was $58.7 billion, down 79% year-on-year. GGR in Q4 2020 was $21.2 billion, down 70% year-on-year and up 347% quarter-on-quarter.

Furthermore, border entry restrictions were introduced and combined with the ongoing IVS temporary suspension, customer arrivals were impacted. The IVS was progressively reinstated through the third quarter of 2020. However, the majority of Mainland Chinese visitors were not eligible to apply for travel to Macau until late September.

In 2020, visitor arrivals to Macau were 5.9 million, down 85% year-on-year, in which overnight visitors and same-day visitors both decreased 85% year-on-year. The average length of stay for overnight visitors increased by 0.6 day to 2.8 days. Mainland visitor arrivals to Macau were 4.8 million, down 83% year-on-year. For Q4 2020, visitor arrivals to Macau were 1.9 million, down 80% year-on-year and up 150% quarter-on-quarter. Mainland visitor arrivals to Macau were 1.7 million, down 73% year-on-year and up 155% quarter-on-quarter.

Group Financial Results

Full Year 2020

The Group posted net revenue of $12.9 billion, down 75% year-on-year. Adjusted EBITDA was $(1.0) billion versus $16.5 billion in 2019. Net profit attributable to shareholders was $(4.0) billion, down 130% year-on-year. Galaxy Macau™’s Adjusted EBITDA was $(0.9) billion versus $12.6 billion in 2019. StarWorld Macau’s Adjusted EBITDA was $(0.3) billion versus $3.5 billion in 2019. Broadway Macau™’s Adjusted EBITDA was $(0.2) billion versus $39.0 million in 2019.

GEG played lucky in its gaming operation during 2020, which increased its Adjusted EBITDA by approximately $25 million. Normalized 2020 Adjusted EBITDA was $(1.0) billion versus $15.7 billion in 2019.

The Group’s total GGR on a management basis1 in 2020 was $11.5 billion, down 81% year-on-year. Mass GGR was $6.1 billion, down 79% year-on-year. VIP GGR was $4.9 billion, down 82% year-on-year. Electronic GGR was $477 million, down 81% year-on-year.

Group Key Financial Data

(HK$'m)

2019

2020

Revenues:

Net Gaming

43,582

8,566

Non-gaming

5,486

1,571

Construction Materials

2,834

2,739

Total Net Revenue

51,902

12,876

Adjusted EBITDA

16,479

(1,020)

Gaming Statistics2

(HK$'m)

2019

2020

Rolling Chip Volume3

715,988

130,584

Win Rate %

3.9%

3.8%

Win

27,583

4,910

Mass Table Drop4

121,879

25,662

Win Rate %

24.0%

23.9%

Win

29,260

6,129

Electronic Gaming Volume

67,942

14,131

Win Rate %

3.7%

3.4%

Win

2,513

477

Total GGR Win5

59,356

11,516

Balance Sheet

Due to our conservative financial management, our balance sheet continues to remain strong. At the year end, cash and liquid investments were $46.0 billion. Total debt was $9.2 billion, including $8.7 billion associated with our treasury yield enhancement program and $0.5 billion of core debt. We remained virtually unlevered with net cash of $36.8 billion. This provides us with valuable flexibility in managing our ongoing operations and allows us to continue investing in our longer term development plans. Given the uncertainty caused by the COVID-19 pandemic, today the Board of Directors has decided not to declare a dividend.

Q4 2020

During Q4 2020, the Group’s net revenue decreased 61% year-on-year and increased 229% quarter-on-quarter to $5.1 billion. Adjusted EBITDA decreased 75% year-on-year and increased 207% quarter-on-quarter to $1.0 billion. Galaxy Macau™’s Adjusted EBITDA decreased 77% year-on-year and increased 193% quarter-on-quarter to $0.7 billion. StarWorld Macau’s Adjusted EBITDA decreased 81% year-on-year and increased 167% quarter-on-quarter to $0.2 billion. Broadway Macau™’s Adjusted EBITDA was $(28) million versus $(37) million in Q3 2020 and $16 million in Q4 2019.

During Q4 2020, GEG played unlucky in its gaming operations which decreased its Adjusted EBITDA by approximately $59 million. Normalized Q4 2020 Adjusted EBITDA decreased 73% year-on-year and increased 214% quarter-on-quarter to $1.1 billion.

The Group’s total GGR on a management basis6 in Q4 2020 was $4.6 billion, down 68% year-on-year and up 436% quarter-on-quarter. Mass GGR was $2.8 billion, down 62% year-on-year, up 685% quarter-on-quarter. VIP GGR was $1.6 billion, down 74% year-on-year and up 249% quarter-on-quarter. Electronic GGR was $178 million, down 73% year-on-year and up 394% quarter-on-quarter.

Group Key Financial Data

(HK$'m)

Q4 2019

Q3 2020

Q4 2020

FY2019

FY2020

Revenues:

Net Gaming

10,745

593

3,651

43,582

8,566

Non-gaming

1,426

246

646

5,486

1,571

Construction Materials

802

711

806

2,834

2,739

Total Net Revenue

12,973

1,550

5,103

51,902

12,876

Adjusted EBITDA

4,052

(943)

1,010

16,479

(1,020)

Gaming Statistics7

(HK$'m)

Q4 2019

Q3 2020

Q4 2020

FY2019

FY2020

Rolling Chip Volume8

168,975

11,801

43,910

715,988

130,584

Win Rate %

3.8%

4.0%

3.8%

3.9%

3.8%

Win

6,460

472

1,648

27,583

4,910

Mass Table Drop9

30,601

1,654

12,037

121,879

25,662

Win Rate %

24.0%

21.7%

23.4%

24.0%

23.9%

Win

7,330

359

2,817

29,260

6,129

Electronic Gaming Volume

17,984

1,324

4,322

67,942

14,131

Win Rate %

3.7%

2.7%

4.1%

3.7%

3.4%

Win

659

36

178

2,513

477

Total GGR Win

14,449

867

4,643

59,356

11,516

Galaxy Macau™

Galaxy Macau™ is the primary contributor to Group revenue and earnings. In 2020, net revenue was down 79% year-on-year to $7.8 billion. Adjusted EBITDA was $(0.9) billion versus $12.6 billion in 2019. Galaxy Macau™ played lucky in its gaming operations which increased its Adjusted EBITDA by approximately $43 million. Normalized 2020 Adjusted EBITDA was $(0.9) billion versus $12.0 billion in 2019.

In Q4 2020, Galaxy Macau™’s net revenue was $3.3 billion, down 64% year-on-year and up 430% quarter-on-quarter. Adjusted EBITDA was $0.7 billion, down 77% year-on-year and up 193% quarter-on-quarter. Adjusted EBITDA margin under HKFRS was 22% (Q4 2019: 34%). Galaxy Macau™ played unlucky in its gaming operations which decreased its Adjusted EBITDA by approximately $41 million. Normalized Q4 2020 Adjusted EBITDA decreased 74% year-on-year and up 199% quarter-on-quarter to $0.8 billion.

The combined five hotels occupancy rate was 49% for Q4 2020 and 28% for the full year 2020.

Galaxy Macau™ Key Financial Data

(HK$'m)

Q4 2019

Q3 2020

Q4 2020

FY2019

FY2020

Revenues:

Net Gaming

8,137

407

2,731

32,780

6,398

Hotel / F&B / Others

872

146

290

3,430

809

Mall

327

73

297

1,231

572

Total Net Revenue

9,336

626

3,318

37,441

7,779

Adjusted EBITDA

3,211

(788)

736

12,641

(900)

Adjusted EBITDA Margin

34%

NEG10

22%

34%

NEG11

Gaming Statistics12

(HK$'m)

Q4 2019

Q3 2020

Q4 2020

FY2019

FY2020

Rolling Chip Volume13

114,669

6,785

29,552

485,343

89,219

Win Rate %

4.0%

4.6%

3.9%

4.2%

4.1%

Win

4,612

309

1,156

20,171

3,673

Mass Table Drop14

18,359

860

7,348

72,786

14,994

Win Rate %

28.4%

25.9%

27.3%

28.0%

28.0%

Win

5,221

223

2,009

20,411

4,198

Electronic Gaming Volume

11,872

746

3,064

45,572

8,755

Win Rate %

4.5%

3.2%

5.0%

4.6%

4.2%

Win

539

23

153

2,076

368

Total GGR Win

10,372

555

3,318

42,658

8,239

StarWorld Macau

In 2020, StarWorld Macau’s net revenue was down 80% year-on-year to $2.2 billion. Adjusted EBITDA was $(0.3) billion versus $3.5 billion in 2019. StarWorld Macau played unlucky in its gaming operations which decreased its Adjusted EBITDA by approximately $17 million. Normalized 2020 Adjusted EBITDA was $(0.3) billion versus $3.3 billion in 2019.

In Q4 2020, StarWorld Macau’s net revenue was $1.0 billion, down 64% year-on-year and up 380% quarter-on-quarter. Adjusted EBITDA was $0.2 billion, down 81% year-on-year and up 167% quarter-on-quarter. Adjusted EBITDA margin under HKFRS was 16% (Q4 2019: 29%). StarWorld Macau played unlucky in its gaming operations which decreased its Adjusted EBITDA by approximately $18 million. Normalized Q4 2020 Adjusted EBITDA decreased 79% year-on-year and increased 176% quarter-on-quarter to $0.2 billion.

Hotel occupancy was 57% for Q4 2020 and 28% for the full year 2020.

StarWorld Macau Key Financial Data

(HK$’m)

Q4 2019

Q3 2020

Q4 2020

FY2019

FY2020

Revenues:

Net Gaming

2,515

184

914

10,403

2,119

Hotel / F&B / Others

125

10

35

461

99

Mall

13

5

6

53

19

Total Net Revenue

2,653

199

955

10,917

2,237

Adjusted EBITDA

782

(223)

150

3,502

(275)

Adjusted EBITDA Margin

29%

NEG15

16%

32%

NEG16

Gaming Statistics17

(HK$'m)

Q4 2019

Q3 2020

Q4 2020

FY2019

FY2020

Rolling Chip Volume18

50,539

4,429

13,280

222,014

37,434

Win Rate %

3.5%

3.3%

3.6%

3.2%

3.0%

Win

1,770

148

481

7,118

1,140

Mass Table Drop19

9,217

619

3,957

36,274

8,474

Win Rate %

17.5%

16.9%

16.9%

18.7%

18.1%

Win

1,614

105

668

6,787

1,535

Electronic Gaming Volume

2,421

155

584

8,632

2,099

Win Rate %

2.2%

2.3%

2.1%

2.3%

2.2%

Win

55

4

11

196

45

Total GGR Win

3,439

257

1,160

14,101

2,720

Broadway Macau™

Broadway Macau™ is a unique family friendly, street entertainment and food resort supported by Macau SMEs, it does not have a VIP gaming component. In 2020, Broadway Macau™’s net revenue was $94 million, down 84% year-on-year. Adjusted EBITDA was $(0.2) billion versus $39 million in 2019. Broadway Macau™ played unlucky in its gaming operations which decreased its Adjusted EBITDA by approximately $1 million. Normalized 2020 Adjusted EBITDA was $(0.2) billion versus $34 million in 2019.

In Q4 2020, Broadway Macau™’s net revenue was $16 million, down 90% year-on-year, up 23% quarter-on-quarter. Adjusted EBITDA was $(28) million, versus $16 million in prior year and $(37) million in Q3 2020. There was no luck impact on Broadway Macau™’s Adjusted EBITDA in Q4 2020.

Hotel occupancy was 22% for Q4 2020 and 20% for full year 2020.

Broadway Macau™ Key Financial Data

(HK$'m)

Q4 2019

Q3 2020

Q4 2020

FY2019

FY2020

Revenues:

Net Gaming

65

1

0

282

22

Hotel / F&B / Others

78

6

10

267

49

Mall

11

6

6

44

23

Total Net Revenue

154

13

16

593

94

Adjusted EBITDA

16

(37)

(28)

39

(162)

Adjusted EBITDA Margin

10%

NEG20

NEG21

7%

NEG22

Gaming Statistics23

(HK$'m)

Q4 2019

Q3 2020

Q4 2020

FY2019

FY2020

Mass Table Drop24

320

NIL*

NIL*

1,334

114

Win Rate %

19.1%

NIL*

NIL*

20.0%

17.9%

Win

61

NIL*

NIL*

267

20

Electronic Gaming Volume

471

36

7

1,923

337

Win Rate %

2.3%

2.4%

1.5%

2.4%

2.1%

Win

11

1

0

47

7

Total GGR Win

72

1

0

314

27

* NIL represents tables not opened during the period.

City Clubs

City Clubs contributed $27 million of Adjusted EBITDA in 2020, down 77% year-on-year. Q4 2020 Adjusted EBITDA was $8 million, versus $28 million in prior year and $1 million in Q3 2020.

City Clubs Key Financial Data

(HK$'m)

Q4 2019

Q3 2020

Q4 2020

FY2019

FY2020

Adjusted EBITDA

28

1

8

117

27

Gaming Statistics25

(HK$'m)

Q4 2019

Q3 2020

Q4 2020

FY2019

FY2020

Rolling Chip Volume26

3,767

587

1,078

8,631

3,931

Win Rate %

2.1%

2.4%

1.1%

3.4%

2.5%

Win

78

15

11

294

97

Mass Table Drop27

2,705

175

732

11,485

2,080

Win Rate %

16.1%

17.8%

19.2%

15.6%

18.1%

Win

434

31

140

1,795

376

Electronic Gaming Volume

3,220

387

667

11,815

2,940

Win Rate %

1.7%

2.0%

1.9%

1.6%

1.9%

Win

54

8

14

194

57

Total GGR Win

566

54

165

2,283

530

Construction Materials Division

The Construction Materials Division contributed Adjusted EBITDA of $1.1 billion in 2020, down 4% year-on-year. Q4 2020 Adjusted EBITDA was $326 million, up 18% year-on-year and up 15% quarter-on-quarter.

Development Update

Galaxy Macau™ and StarWorld Macau

We continue to make ongoing progressive enhancements to our resorts to ensure that they remain competitive and appealing to our guests.

Cotai – The Next Chapter

GEG is uniquely positioned for long term growth. We are proceeding with the development of Phases 3 & 4 and continue to review and refine plans to ensure a world-class optimal development. We see the premium market evolving with this segment preferring higher quality and spacious rooms. Phases 3 & 4 combined will have approximately 3,000 high end and family rooms and villas, 400,000 square feet of MICE space, a 500,000 square feet 16,000-seat multi-purpose arena, F&B, retail and casinos, among others. We will try to maintain our development targets, however due to COVID-19, development timelines may be impacted. At this point we cannot quantify the impact but we will endeavor to maintain our schedule.

Hengqin / Greater Bay Area

We continue to make progress with the planning of our project on Hengqin that will complement our high energy resorts in Macau.

We are also expanding our focus beyond Hengqin and Macau to potentially include opportunities within the rapidly expanding Greater Bay Area.

International

Our Japan based team continues with our Japan development efforts even as they deal with the COVID-19 crisis. We view Japan as a long term growth opportunity that will complement our Macau operations and our other international expansion ambitions. GEG, together with Monte-Carlo SBM from the Principality of Monaco and our Japanese partners, remain interested in bringing our brand of World Class IRs to Japan.

Selected Major Awards for 2020

Award

Presenter

GEG

Mr. Francis Lui, Vice Chairman of Galaxy Entertainment Group – Rank No.1

13th Asian Gaming Power 50

Casino Operator of the Year Australia & Asia

Socially Responsible Operator (Asia / Australia)

13th International Gaming Awards

Certificate of Excellence in Investor Relations

HKIRA 6th Investor Relations Awards

Best in Sector – Consumer Discretionary

Certificate of Excellence in Investor Relations

IR Magazine Greater China Awards 2020

The Most Influential Social Responsibility Award

The 2nd Greater China Most Influential Brand & Entrepreneur Awards Ceremony

Employer Recognition for the Hiring "Senior Talents"

2020 Outstanding Elderly Employees Award and Employer Recognition Scheme for the Hiring of "Senior Talents"

Original Convention and Exhibition Award

Macao Convention and Exhibition Commendation Awards 2020

Galaxy Macau

Five-Star Hotel:
- The Ritz-Carlton, Macau
- Banyan Tree Macau

Five-Star Restaurant:

- Lai Heen

- Belon

Five-Star Spa:

- The Ritz-Carlton Spa, Macau

- Banyan Tree Spa Macau

2020 Forbes Travel Guide

Energy Saving Concept Award

Excellence Award

Macau Energy Saving Activity 2020

Best of the Best Awards Top 10 Hotels for Families - China

Travelers’ Choice Winner:

- The Ritz-Carlton, Macau

- Banyan Tree Macau

- Hotel Okura Macau

- JW Marriott Hotel Macau

Tripadvisor 2020 Travelers' Choice

Best of the Best 2020 - The Best Shopping Experience

Robb Report China

2019 Macau Green Hotel Awards - Gold Award:

- Banyan Tree Macau

- JW Marriott Hotel Macau

- The Ritz-Carlton, Macau

DSPA & MGTO

Annual Gourmet Landmark - Galaxy Macau™

Special Recommended Must Eat Restaurant - Fook Lam Moon

2019-2020 China Feast Restaurant Awards by Restaurant Review

Macau's Best Resort Spa 2020 - Banyan Tree Spa Macau

World Spa Awards

Most Anticipated Hotel - Andaz Macau

Most Anticipated Convention Center - Galaxy International Convention Center

2020 Golden Five Stars Award by China International Conference & Exhibition

StarWorld Macau

My Favorite Hotel Restaurant in Macau - Feng Wei Ju

U Magazine Favorite Food Awards 2020

I Food Award 2020 - My Favorite Restaurant in Hotel - Feng Wei Ju

I Food Award

Broadway Macau

Agoda Customer Review Award 2020

Agoda.com

Travelers’ Choice Winner

TripAdvisor 2020 Travelers' Choice

Loved by Guests Award 2020

Hotels.com

Construction Materials Division

Caring Company Scheme – 15 Years Plus Caring Company Logo

The Hong Kong Council of Social Service

Occupational Health Award 2019-20 - Joyful @ Healthy Workplace Best Practices Award (Enterprise / Organisation Category) - Grand Award

Occupational Safety and Health Council

Construction Industry Caring Organization

Construction Industry Sports and Volunteering Programme

Hong Kong Awards for Environmental Excellence – Manufacturing and Industrial Services – Certificate of Merit

Hong Kong Green Organisation Certification

- Wastewi$e - Certificate - Excellence Level

- - Carbon Reduction - Certificate – Achieved 7% Carbon Reduction

Environmental Campaign Committee

Good Employer Charter 2020:

- Signatory of the Good Employer Charter 2020

- Family-friendly Good Employer Logo

Labour Department

BOCHK Corporate Environmental Leadership Awards 2019 – Eco Partner, 3 Years+ Eco Pioneer

Bank of China (Hong Kong); Federation of Hong Kong Industries

Social Capital Builder Awards – Social Capital Leader Logo Award

Labour and Welfare Bureau;

Community Investment and Inclusion Fund

Outlook

We believe that COVID-19 will continue to impact Macau for the immediate future. Mainland China, Hong Kong and Macau continue to experience social distancing measures and travel restrictions which have been progressively easing. We are pleased with the progressive reinstatement of the IVS visas in Mainland through Q3 2020 and we expect visitation to improve as Macau benefits from the ramping up of the IVS program. In the medium to longer term, we have great confidence in the future of Macau. However, we do acknowledge the ongoing difficulties associated with COVID-19 and the potential for COVID-19 to materially adversely impact our future financial results.

The expanded infrastructure will continue to improve the accessibility to Macau. In particular, the new Hengqin immigration port and the extension line of Zhuhai Urban-Airport Intercity Railway which commenced operation in August 2020. In addition, the Macau Government plans to repurpose part of the Taipa Ferry Terminal into the second terminal building of the Macau International Airport and increase the total airport capacity. The Macau Government also plans to build the east section of the Light Rail Transport which will connect the peninsula’s Gongbei Border Gate checkpoint to the Taipa Ferry Terminal.

We are pleased to hear that Macau and other locations are proceeding with their COVID-19 vaccination rollout plans. We believe that when Mainland and international tourists make future travel plans, health and safety will be foremost in their minds.

Specifically, to GEG, the Group is ready to capture future growth with our substantial development pipeline. These include the ongoing development of Cotai Phases 3 & 4 which are specifically designed to capture a larger share of the Mass business, renovate the existing properties, reconfigure and introduce new products to our resorts to ensure they remain highly competitive and appealing to our valuable guests. These projects will support Macau’s economy in the near term.

We remain engaged in our international expansion plans including Japan. We understand that due to the impact of COVID-19, Japan has revised their timeline of Integrated Resorts licenses and we remain interested in introducing our brands to Japan.

In the shorter to medium term, we do acknowledge it is hard to determine the speed of recovery with anticipated progressive-opening of travel restrictions and expected social distancing within our resorts. Further, we are also mindful that consumer sentiment has been impacted by a slower global economy, ongoing trade tensions and currency fluctuation among others. These events have been impacting consumer sentiment and subsequent spending habits. Longer term, we have great confidence in Macau and we will continue with our development program. GEG remains committed to support the Government’s vision to develop Macau into a World Center of Tourism and Leisure.

Through our prudent business management, GEG has a strong and virtually unlevered balance sheet. This allows us to continue to invest into and upgrade our existing resorts and proceed with the planned opening of Cotai Phases 3 & 4. During the period of low revenue, we will continue to focus on effective cost control. However, we are mindful not to cut costs excessively and therefore adversely impact our renowned "World Class, Asian Heart" service standards and customer experiences.

- END -

About Galaxy Entertainment Group (HKEx stock code: 27)

Galaxy Entertainment Group ("GEG" or the "Group") is one of the world’s leading resorts, hospitality and gaming companies. It primarily develops and operates a large portfolio of integrated resort, retail, dining, hotel and gaming facilities in Macau. The Group is listed on the Hong Kong Stock Exchange and is a constituent stock of the Hang Seng Index.

GEG is one of the three original concessionaires in Macau with a successful track record of delivering innovative, spectacular and award-winning properties, products and services, underpinned by a "World Class, Asian Heart" service philosophy, that has enabled it to consistently outperform the market in Macau.

GEG operates three flagship destinations in Macau: on Cotai, Galaxy Macau™, one of the world’s largest integrated destination resorts, and the adjoining Broadway Macau™, a unique landmark entertainment and food street destination; and on the Peninsula, StarWorld Macau, an award winning premium property.

The Group has the largest undeveloped landbank of any concessionaire in Macau. When The Next Chapter of its Cotai development is completed, GEG’s resorts footprint on Cotai will double to more than 2 million square meters, making the resorts, entertainment and MICE precinct one of the largest and most diverse integrated destinations in the world. GEG is also progressing plans for its Hengqin project and we are also expanding our focus beyond Hengqin and Macau to potentially include opportunities within the rapidly expanding Greater Bay Area. These projects will help GEG develop and support Macau in its vision of becoming a World Centre of Tourism and Leisure.

In July 2015, GEG made a strategic investment in Société Anonyme des Bains de Mer et du Cercle des Etrangers à Monaco ("Monte-Carlo SBM"), a world renowned owner and operator of iconic luxury hotels and resorts in the Principality of Monaco. GEG continues to explore a range of international development opportunities with Monte-Carlo SBM including Japan.

GEG is committed to delivering world class unique experiences to its guests and building a sustainable future for the communities in which it operates.

For more information about the Group, please visit www.galaxyentertainment.com

1 The primary difference between statutory gross revenue and management basis gross revenue is the treatment of City Clubs revenue where fee income is reported on a statutory basis and gross gaming revenue is reported on a management basis. At the group level the gaming statistics include Company owned resorts plus City Clubs.2 Gaming statistics are presented before deducting commission and incentives.
3 Reflects junket rolling chip volume only.
4 Mass table drop includes the amount of table drop plus cash chips purchased at the cage.
5 Total GGR win includes gaming win from City Clubs.
6 The primary difference between statutory gross revenue and management basis gross revenue is the treatment of City Clubs revenue where fee income is reported on a statutory basis and gross gaming revenue is reported on a management basis. At the group level the gaming statistics include Company owned resorts plus City Clubs.
7 Gaming statistics are presented before deducting commission and incentives.
8 Reflects junket rolling chip volume only.
9 Mass table drop includes the amount of table drop plus cash chips purchased at the cage.
10 NEG represents negative margin.
11 NEG represents negative margin.
12 Gaming statistics are presented before deducting commission and incentives.
13 Reflects junket rolling chip volume only.
14 Mass table drop includes the amount of table drop plus cash chips purchased at the cage.
15 NEG represents negative margin.
16 NEG represents negative margin.
17 Gaming statistics are presented before deducting commission and incentives.
18 Reflects junket rolling chip volume only.
19 Mass table drop includes the amount of table drop plus cash chips purchased at the cage.
20 NEG represents negative margin.
21 NEG represents negative margin.
22 NEG represents negative margin.
23 Gaming statistics are presented before deducting commission and incentives.
24 Mass table drop includes the amount of table drop plus cash chips purchased at the cage.
25 Gaming statistics are presented before deducting commission and incentives.
26 Reflects junket rolling chip volume only.
27 Mass table drop includes the amount of table drop plus cash chips purchased at the cage.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210224006247/en/

Contacts

Galaxy Entertainment Group - Investor Relations
Mr. Peter J. Caveny / Ms. Yoko Ku / Ms. Joyce Fung
Tel: +852 3150 1111
Email: ir@galaxyentertainment.com