Asian Operators Post Mixed Results in 2018Q3

The four Asia-based IR operators aiming for a license in the Japanese market—Galaxy, Melco, Genting, and Bloomberry—posted mixed results in the July-September period, even as predictions of a slowdown in the Asian gaming industry abounded.

Macau-based Galaxy Entertainment saw its net revenues rise 6% to about US$13 billion. The group’s adjusted EBITDA was US$3.9 billion, up 10% year-on-year.

In spite of these positive results, Galaxy Chairman Lui Che-Woo warned of more difficult times ahead: “The continued growth in the rapidly emerging and under-penetrated middle-class in Mainland China and their demand for leisure and travel gives us confidence in the longer term outlook for Macau. However, I do acknowledge that the current international trade tensions, rising interest rates, and a slowing economy may impact consumer sentiment in the short term.”

Melco Resorts & Entertainment’s third quarter results were more disappointing, with an 11% year-on-year drop in net revenues to US$1.22 billion. Melco’s decline in profitability was much sharper.

Among other things, Melco Chairman and CEO Lawrence Ho put stress on the company’s Japan prospects in the quarterly statement: “Japan continues to be a core focus for us. We expect development of the next generation of Integrated Resorts to soon commence in this incredibly exciting, yet currently under-penetrated, tourism destination. With our focus on the Asian premium segment, high quality assets, dedication to world-class entertainment offerings, market-leading social safeguards and compliance culture, and our commitment to being an ideal partner to local governments and communities alike, we believe Melco is in a strong position to help Japan realize the vision for integrated resort development with a unique Japanese touch.”

Genting Singapore saw only a 1% growth in revenue to US$639 million, but a dramatic 25% year-on-year growth in profits to US$210 million.

Genting Singapore’s quarterly statement also took note of its Japan campaign: “On the Japan front, we continue to work steadily towards the expected bidding process for Integrated Resorts in the second half of 2019 following the establishment of the basic policy for developing IRs. Specific cities have shown interest in having an IR and we have responded to their requests for information, views, and comments. Concurrently, we have also engaged in discussions with stakeholders to understand the environment and the localities where such cities are involved.”

Philippines-based Bloomberry Resorts, which operates the Solaire Resort & Casino and is also exploring a Japan IR bid, reported a net revenue increase of 3% year-on-year to US$188 million. However, its net profits dropped by about 39% to US$20.6 million in the third quarter of 2018. (AGB Nippon)