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Macau casino firm Galaxy Entertainment’s turnaround shows sector has winning hand, even if Covid-19 dominates near term, analysts say
- Galaxy has also announced a special dividend of 30 Hong Kong cents per share
- Other companies, however, are not expected to pay dividends in the near term, Morningstar analyst says
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A recovery in Macau’s casino industry will continue, even if its near-term outlook remained challenging because of recent surges in Covid-19 cases in neighbouring Hong Kong and mainland China, analysts said.
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The comments came as casino operator Galaxy Entertainment, which is owned by Hong Kong property tycoon Lui Che-woo, reported net profits of HK$1.33 billion (US$170 million) for the full year of 2021. The results, announced in an exchange filing last week, beat analyst expectations and reversed a HK$3.9 billion loss in 2020.
Galaxy also announced a special dividend of 30 Hong Kong cents per share, which “attests to our confidence in Macau, our financial strength and our future earnings potential”, Lui said in the filing. The total estimated amount of the dividend to be distributed was around HK$1.3 billion, which will be paid on or around April 29.
The special dividend came as a surprise and was a year earlier than expected, emphasising Galaxy’s “strong financial position despite the continued pandemic impact”, Morningstar senior equity analyst Jennifer Song said in an emailed response.
Galaxy had net cash of HK$27 billion at the end of December, the highest among its peers, according to Morningstar.
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