* 2013 net profit in line with analyst expectations of
* Shares up 134 percent in Hong Kong trading over past year
* Plans to build a $1.6 billion resort on China's Hengqin
(Adds comments from Galaxy executives, context)
HONG KONG, March 19 Macau casino operator Galaxy
Entertainment Group Ltd looks set to build on last
year's record earnings as it pencils in plans for glittering
mega casinos and positions itself for the next wave of
high-rollers from mainland China.
The company is also ploughing big money into a kids-friendly
resort on a neighbouring island to attract Chinese families.
Hong Kong-listed Galaxy, the second-biggest gaming firm in
Macau after Sands China Ltd, is launching its second
phase of expansion since winning its first gaming concession in
the former Portuguese colony more than a decade ago.
Macau, a special administrative region like nearby Hong
Kong, is the only place in China where casino gambling is
allowed. Located on China's southern coast, Macau's gaming
revenues last year were nearly three times greater than Las
Vegas, Australia and Singapore combined.
Galaxy, controlled by the family of Hong Kong construction
tycoon Lui Che Woo, on Wednesday posted a 36 percent jump in
2013 net profit to HK$10.1 billion ($1.30 billion). The company
also said it had HK$10.3 billion of cash on hand and was
virtually debt-free as of the end of December.
A strong balance sheet will help Galaxy compete with MGM
China Holdings Ltd and Steve Wynn's Wynn Macau Ltd
as casino operators race to develop new properties to
capture a larger slice of the Macau market, which raked in $45
billion in gaming revenue last year.
Galaxy is expected to launch a new casino in 2015, making it
one of the first operators to open a new gambling property.
Macau's second wave of casino expansion will see eight new mega
properties by 2017.
Galaxy is armed with the biggest land bank on Macau's
developing Las Vegas-style strip known as Cotai. The company's
current casino on Cotai accounts for just 25 percent of its
total allocated space.
Construction for its third and fourth phases is expected to
begin at the end of this year with a budget of HK$50
Galaxy is also set to build a 10 billion yuan ($1.6 billion)
resort on neighbouring Hengqin island, an area three times the
size of space-starved Macau. The resort will be located on the
southwestern tip of the island.
While Hengqin authorities will not permit gambling, Macau
casino operators have been keen to expand leisure facilities to
help complement their gaming properties across the water.
"We hope to build an iconic product which is five-star and
leverages on the coastline, on land, on sea to offer
entertainment facilities," Deputy Chairman Francis Lui told
reporters at an earnings briefing on Wednesday.
"We have a lot of flexibility with this project," he said,
adding that there is no need to raise funds for the project.
Galaxy may look to build villas over water as seen in the
Shares in Galaxy have surged 134 percent in the past year
versus the benchmark Hang Seng Index which is down 2
percent in the same period.
Galaxy, a $40 billion company by market capitalisation, is
the best performer among 52 top casino operators in the world on
price performance, according to Thomson Reuters StarMine.
The stock ended 2.83 percent lower on Wednesday, after the
earnings announcement. The Hang Seng fell 0.07 percent.
Galaxy said earnings before interest, taxes, depreciation
and amortisation (EBITDA) rose 41 percent to HK$3.5 billion in
the fourth quarter from a year earlier. That was about 4 percent
below the average of analysts' estimates.
The company is also looking across Asia to expand, Galaxy
executives said during the media briefing, without specifying
($1 = 7.7669 Hong Kong Dollars)
($1 = 6.1920 Chinese Yuan)
(Reporting by Farah Master; Editing by Ryan Woo)