GALAXY ENTERTAINMENT GROUP

REPORTS Q4 & ANNUAL 2021 RESULTS

CONTINUE WORKING CLOSELY WITH MACAU COMMUNITY

TO CONTROL COVID-19

FULL YEAR GROUP ADJUSTED EBITDA OF $3.5 BILLION

IMPROVES VERSUS $(1.0) BILLION IN 2020

FULL YEAR GROUP NPAS OF $1.3 BILLION

IMPROVES VERSUS $(4.0) BILLION IN 2020

Q4 2021 GROUP ADJUSTED EBITDA OF $1.0 BILLION, UP 107% QOQ

INCLUDED A ONE-OFFBENEFIT OF $0.2 BILLION

CONTINUE INVESTING IN MACAU'S FUTURE WITH

COTAI PHASES 3 & 4

ANNOUNCED A SPECIAL DIVIDEND OF $0.30 PER SHARE

Hong Kong, 23 February 2022 - 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 2021. (All amounts are expressed in HKD unless otherwise stated)

LETTER FROM THE CHAIRMAN OF GALAXY ENTERTAINMENT GROUP

I would like to take this opportunity to provide you with a broad market overview and to review the financial performance of GEG in 2021. Macau like the rest of the world continued to experience the impact of COVID-19 throughout 2021, with sporadic outbreaks in Mainland China and the subsequent travel and quarantine restrictions impacting visitor arrivals.

I would like to acknowledge the Macau Government for acting decisively and effectively controlling the pandemic. As a socially responsible corporation, GEG continues to support the Macau Government's epidemic preventive work. GEG's team members overall COVID-19 vaccination rate has reached 94%.

Moving onto our full year performance, the Group's Net Revenue, Adjusted EBITDA and NPAS all improved in 2021 relative to 2020. Our balance sheet also remained healthy and we are well positioned to navigate through the pandemic. Further, we announced a special dividend of $0.30 per share to be paid on or about 29 April 2022. This attests to our confidence in Macau, our financial strength and our future earnings potential.

We were encouraged by the performance over the recent Chinese New Year holiday. Even though visitor arrivals were less than anticipated due to travel restrictions, gaming revenue was solid, driven by premium mass, hotel occupancy was higher and retails sales were strong. This is evidence of strong pent up demand for tourism and leisure in Macau.

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During this economically challenging period, GEG continued to invest in the advancement of Macau's economy with our Cotai Phases 3 and 4 developments and renovating and upgrading our existing resort facilities where we intend to align the openings with the prevailing market conditions. We continue to pursue our project in Hengqin and are expanding our focus beyond Hengqin and Macau to potentially include opportunities within greater China including the rapidly developing Greater Bay Area.

In January 2022, the Macau Legislative Assembly passed its first reading of the "Legal Framework for the Exploitation of Games of Chance in Casino" and the Legislative Assembly Standing Committee is now going through a committee discussion. GEG fully supports the proposed legislation including that national and Macau security should be put as the top priority and the economic diversification and sustainable development should be a primary consideration.

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

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Q4 & FULL YEAR 2021 RESULTS HIGHLIGHTS

GEG: Continues to be Impacted by COVID-19 and Travel Restrictions

  • Full Year Group Net Revenue of $19.7 billion, up 53% year-on-year
  • Full Year Group Adjusted EBITDA of $3.5 billion versus $(1.0) billion in 2020
  • Full Year Group net profit attributable to shareholders ("NPAS") of $1.3 billion versus $(4.0) billion in 2020 including $283 million of non-recurring and other charges in 2021
  • Full year Adjusted NPAS of $1.6 billion after adjusting for non-recurring and other charges
  • Q4 Group Net Revenue of $4.8 billion, down 7% year-on-year and up 11% quarter-on-quarter
  • Q4 Group Adjusted EBITDA of $1.0 billion, up 3% year-on-year and up 107% quarter-on-quarter
  • Q4 Group Adjusted EBITDA included a one-off expense reversal benefit of $0.2 billion and played lucky which increased Adjusted EBITDA by approximately $57 million, normalized Q4 Adjusted EBITDA of $818 million, down 16% year-on-year and up 49% quarter-on-quarter

Galaxy MacauTM: Continues to be Impacted by COVID-19 and Travel Restrictions

  • Full Year Net Revenue of $13.3 billion, up 71% year-on-year
  • Full Year Adjusted EBITDA of $2.9 billion versus $(0.9) billion in 2020
  • Q4 Net Revenue of $3.2 billion, down 3% year-on-year and up 13% quarter-on-quarter
  • Q4 Adjusted EBITDA of $763 million, up 4% year-on-year and up 68% quarter-on-quarter
  • Played lucky in Q4 which increased Adjusted EBITDA by approximately $25 million, normalized Q4 Adjusted EBITDA of $738 million, up 5% year-on-year and up 52% quarter-on-quarter
  • Hotel occupancy for Q4 across the five hotels was 39%

StarWorld Macau: Continues to be Impacted by COVID-19 and Travel Restrictions

  • Full Year Net Revenue of $3.3 billion, up 47% year-on-year
  • Full Year Adjusted EBITDA of $0.4 billion versus $(0.3) billion in 2020
  • Q4 Net Revenue of $669 million, down 30% year-on-year and up 1% quarter-on-quarter
  • Q4 Adjusted EBITDA of $44 million, down 71% year-on-year and up 76% quarter-on-quarter
  • Played lucky in Q4 which increased Adjusted EBITDA by approximately $32 million, normalized Q4 Adjusted EBITDA of $12 million, down 92% year-on-year and down 71% quarter-on-quarter
  • Hotel occupancy for Q4 was 55%

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

  • Full Year Net Revenue of $57 million, down 39% year-on-year
  • Full Year Adjusted EBITDA of $(84) million, versus $(162) million in 2020
  • Q4 Net Revenue of $14 million, down 13% year-on-year, flat quarter-on-quarter
  • Q4 Adjusted EBITDA of $(22) million, versus $(19) million in Q3 2021 and $(28) million in Q4 2020
  • There was no luck impact on Q4 Adjusted EBITDA
  • Hotel occupancy for Q4 was 3%

Balance Sheet: Healthy and Liquid Balance Sheet

  • As at 31 December 2021, cash and liquid investments were $33.4 billion and net cash was $27.0 billion
  • As at 31 December 2021, debt of $6.4 billion primarily reflects ongoing treasury yield management initiatives with minimal core debt
  • Announced a special dividend of $0.30 per share payable on or about 29 April 2022

Development Update: Continue Making Progress on Cotai Phases 3 & 4

  • Continue to make ongoing progressive enhancements to our resorts to ensure that they remain competitive and appealing to our guests
  • Cotai Phases 3 & 4 - Phase 3 is effectively completed and our efforts are firmly focused on the development of Phase 4. Phases 3 & 4 have a strong focus on non-gaming, primarily targeting MICE, entertainment, family facilities and also include gaming
  • Will align the opening of Raffles at Galaxy Macau with prevailing market conditions, followed by the opening of Galaxy International Convention Center and Andaz Macau, and proceeding with the construction of remaining phases
  • Future development opportunities - Continue to pursue our Hengqin project as well as expanding our focus into Mainland China with a particular emphasis on the Greater Bay Area
  • International - Continuously exploring opportunities in overseas markets

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Macau Market Overview

Basically for the whole of 2020 and 2021 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 2021 was $84.3 billion, up 44% year-on-year. GGR in Q4 2021 was $18.5 billion, down 13% year-on-year and up 2% quarter-on-quarter.

During Q4 2021, in tune with the broad range of changes in the regulatory environment we suspended VIP gaming operations, we will continue to monitor the situation.

In reviewing visitor arrivals, Macau arrivals have increased during 2021, admittedly off a low base. In January 2021, visitor arrivals were approximately 18,000 per day. In December 2021, this had increased to approximately 26,000 per day. Throughout the year arrival numbers varied to reflect sporadic outbreaks in COVID-19 and the subsequent travel and quarantine restrictions. But importantly we are moving in the right direction. Whilst we are encouraged by the increase in visitor arrivals we do acknowledge they still remain well below pre-pandemic levels. We look forward to further improvement in 2022 with possibly the progressive reinstatement of E-Visas and the opening of the Hong Kong border.

In 2021, visitor arrivals to Macau were 7.7 million, up 31% year-on-year, although the figure was 80% lower than 2019. Overnight visitors and same-day visitors increased 31% and 30% year-on- year respectively. The average length of stay for overnight visitors increased by 0.2 day to 1.6 days. Mainland visitor arrivals to Macau were 7.0 million, up 48% year-on-year. For Q4 2021, visitor arrivals to Macau were 2.0 million, up 4% year-on-year and up 7% quarter-on-quarter. Mainland visitor arrivals to Macau were 1.8 million, up 4% year-on-year and up 8% quarter-on-quarter.

Group Financial Results

Full Year 2021

The Group posted Net Revenue of $19.7 billion, up 53% year-on-year. Adjusted EBITDA was $3.5 billion versus $(1.0) billion in 2020, which included a one-off expense reversal benefit of $0.2 billion in Q4 2021. Net profit attributable to shareholders was $1.3 billion versus $(4.0) billion in 2020. Galaxy Macau™'s Adjusted EBITDA was $2.9 billion versus $(0.9) billion in 2020. StarWorld Macau's Adjusted EBITDA was $374 million versus $(275) million in 2020. Broadway Macau™'s Adjusted EBITDA was $(84) million versus $(162) million in 2020.

GEG played lucky in its gaming operation during 2021, which increased its Adjusted EBITDA by approximately $253 million. In addition, the Group experienced a one-off expense reversal benefit of $0.2 billion, normalized Adjusted EBITDA was $3.1 billion versus $(1.1) billion in 2020.

The Group's total GGR on a management basis1 in 2021 was $17.3 billion, up 51% year-on-year. Mass GGR was $11.2 billion, up 83% year-on-year. VIP GGR was $5.5 billion, up 11% year-on- year. Electronic GGR was $642 million, up 35% year-on-year.

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.

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Summary Table of GEG Q4 and Full Year 2021 Adjusted EBITDA and Adjustments

Q4

Q3

Q4

in HK$'m

2020

2021

2021

YoY

QoQ

Adjusted EBITDA

1,010

503

1,043

3%

107%

Luck

(59)

(47)

57

COVID insurance claim

100

-

-

Expense reversal benefit

-

-

168

Normalized Adjusted

969

550

818

-16%

49%

EBITDA

FY FY

2020 2021

(1,020) 3,537

25 253

100 -

  • 168

(1,145) 3,116

Full Year GEG Adjusted EBITDA (HK$'m)

2020

2021

$3,537

$2,905

City Clubs,

$(1,020)

$62

City Clubs,

$374

$27

$976

Reversal,

$1,118

$168

$(828)

$(864)

$(275)

Broadway,

Broadway,

$(84)

$(900)

$(162)

Galaxy Macau™

StarWorld Macau

Broadway Macau™

City Clubs

Construction Materials

Corporate Costs

Expense Reversal (Corporate)

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Galaxy Entertainment Group Limited published this content on 23 February 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 23 February 2022 04:38:04 UTC.