Galaxy and Sands China Experience Revenue Shifts in Cotai Malls

In the competitive landscape of Cotai's prestigious gaming resort malls, two major players, Galaxy Entertainment Group Ltd and Sands China Ltd, have reported distinctive trends in their financial performance. Their recent third-quarter reports reveal a nuanced picture: while there has been an uptick in net revenues from the previous quarter, a year-on-year decline was evident. These insights emerged from recent third-quarter financial reports, offering a glimpse into the shifting dynamics of retail performance in Cotai's bustling mall sector.

As we dive deeper into the specifics, Galaxy Macau's mall segment achieved net revenue of HKD347 million (equivalent to nearly USD44.6 million) for the three months ending September 30. This marks a sequential increase of 6.4 percent from the last quarter's HKD326 million. However, in a year-on-year comparison, there was a decrease of approximately 5.2 percent from HKD366 million in the same period last year. The performance reflected broader economic conditions and consumer behaviors post-COVID-19.

Mall Revenue Analysis: Galaxy Macau and Sands China

For the cumulative performance of Galaxy Macau in the first nine months of the year, the mall's net revenue totaled HKD1.04 billion. Despite a year-on-year decline of 12.7 percent, this figure represented an impressive recovery, showing an increase of nearly 15.5 percent compared to the same period in 2019, a baseline year before the disruption caused by the COVID-19 pandemic.

Turning to Sands China, insights from their U.S.-based parent company, Las Vegas Sands Corp, illustrate a mixed performance for their Cotai-based mall outlets. These include significant locations such as The Venetian Macao, The Londoner Macao, The Plaza Macao, Four Seasons Macao, and The Parisian Macao.

Collectively, their net revenue for the third quarter reached USD125 million, marking a 6.8 percent rise from the previous quarter's USD117 million. Nonetheless, when viewed year-on-year, this represents a drop of 5.3 percent from the USD132 million recorded in the third quarter of last year. Cumulatively, the January to September net revenue for Sands China’s malls was USD357 million, nearly mirroring the previous year’s performance but showcasing a near 3 percent decline from results seen in 2019. This comparison period followed the significant renovation and rebranding of Sands Cotai Central into The Londoner Macao.

Visitor Spending and Retail Sales in Macau

In the third quarter of the year, Sands China's top mall revenue contributors were The Venetian Macao and The Plaza Macao, along with Four Seasons Macao, recording net revenues of USD59 million and USD40 million, respectively. However, the latter duo saw a decline in their performance by about 20 percent compared to the previous year's third quarter. A specific highlight is The Shoppes at Four Seasons, which remains at the pinnacle in terms of 'tenant sales per square foot.' This measurement, reflecting the aggregation of reported sales over a trailing 12-month period divided by related square footage, stayed at the high end across Sands China's properties, yet it saw a year-on-year decrease. In the third quarter, the tenant sales per square foot yielded USD5,832, reflecting a sequential downturn of 5.4 percent and a year-on-year decrease of 13.1 percent.

Sands China highlights that The Shoppes at Four Seasons hosts 'over 150' luxury brands, underscoring its position within the high-end retail market. Despite the challenges noted by Sands and Galaxy Entertainment in mall revenue, promising signs from visitor spending emerged. The Macau Statistics and Census Service reported an increase in per-capita visitor spending for shopping to MOP2,381 (USD296.93) in the third quarter, up 1.5 percent from the previous year. This figure also shows a significant recovery, increasing nearly 16.5 percent from the comparable quarter in 2019. Adding to the overview, a survey from the census service indicated a 2.5 percent sequential rise in Macau's third-quarter retail sales, valued at MOP16.59 billion. Nonetheless, this still marked a 15.5 percent decline year-on-year, heavily influenced by slumping sales in 'watches, clocks and jewellery,' as well as 'leather goods.'

Over the first nine months of the year, Macau's total retail sales reached MOP53.48 billion, a decline of nearly 17 percent year-on-year, while already recuperating to 95 percent of the sales seen before the pandemic in 2019. 

Source: Galaxy, Sands see 3Q Cotai mall net revenue dip y-o-y, GGRAsia, November 29, 2024. 

Posted by Wizard
Nov 29 2024