Upcoming Cotai Phase 4 set to be a ‘game changer,’ Galaxy says at interim results

Galaxy Entertainment Group reported interim results on Wednesday with second quarter earnings before interest, taxes, depreciation, and amortisation (EBITDA) falling in line with consensus estimates.

First-half revenue rose 4 percent to HK$24.2 billion while adjusted EBITDA grew just 1 percent to HK$7.0 billion. Slot revenues were up 20 percent, helped in part by higher win rates.

At the property level, revenues at Galaxy Macau and StarWorld Macau each rose 6 percent year-on-year, while EBITDA grew just 3 and 5 percent higher, respectively. Management noted that renovation works on roughly 40 percent of StarWorld’s room inventory negatively impacted adjusted EBITDA by HK$14 million.

[See more: Macao stock valuations approaching pandemic lows as markets wait for first-half results]

The group reported cash and liquid investments of HK$37.7 billion, yielding a net cash position of HK$35.9 billion after accounting for HK$1.8 billion in debt. A final dividend of HK$0.80 per share was paid in June 2026. The board declared an interim dividend of HK$0.90 per share, payable in September 2026. 

In a sector update following Galaxy’s interim release, Morgan Stanley highlighted that the dividend per share was 29 percent higher than a year ago, while the 75 percent payout ratio, an increase from an earlier payout of 60 percent, was a positive surprise. The net cash position means that the stock’s 5.5 percent dividend yield is sustainable, according to the analysts.

[See more: Macao’s gambling revenues set for an August pickup: Jefferies]

The group announced it has begun renovations to merge select rooms into larger suites, with completion expected in the first quarter of 2027. That same year will mark the completion of Cotai Phase 4, a 600,000-square-meter development featuring five luxury hotels and 1,350 rooms. 

Echoing similar industry softness as other operators, Galaxy noted that performance was partially dragged down by the FIFA World Cup, marking a trend consistent with previous tournaments where major sport events temporarily alter customer behaviour and divert gaming revenues and attention. 

However, management pointed out that momentum in gross gaming revenue (GGR) has begun to emerge following the World Cup’s conclusion. Macao’s GGR for the first nine days of August is up 3 percent from last year and is tracking at 12 percent above July’s run rate, according to Jefferies.