Jefferies predicts Galaxy Entertainment to be sole Macau casino operator to distribute dividends in 2024

According to Jefferies, in 2024 the only Macau casino operator to pay dividends will be Galaxy Entertainment Group Ltd.

This prediction came from talks with Galaxy Entertainment’s executives at an investment event in London, UK, according to analyst Andrew Lee, who is based in Hong Kong.

In a statement on Wednesday, Lee said that they anticipate Galaxy to be the only Macau operator to pay dividends in 2024 due to the company’s sound financial standing, with the possibility of increasing the payment % this year. He highlighted Galaxy’s status as the only company that will pay dividends in the first half of 2023 and made the same projections for the second half of 2023 and 2024 as a whole.

Although Galaxy has always maintained a 30% dividend distribution policy, Jefferies anticipates that the company’s strong financial position will lead to a steady increase in the payout ratio. The total dividends paid to shareholders divided by the net income of the business is often used to compute the dividend payout ratio.

Lee said that although the payout ratio is anticipated to remain constant for the results of the second half of 2023, which are scheduled for February 28, it may increase for the results of the first half of 2024.

Jefferies said that by the end of the third quarter of 2023, Galaxy Entertainment already had HKD23 billion in cash, which is sufficient to finance the remaining HKD23 billion in capital expenditure for Phases 3 and 4 of the company’s flagship Galaxy Macau resort on Cotai.

On the other hand, Fitch Ratings Inc. revised its July forecast indicating that Sands China Ltd., another Macau casino operator, may resume dividend payments in 2025 and now expects them to start in 2026.

Before committing to a date for dividend payments to restart, the parent company of Macau operator Wynn Macau Ltd said it will need to evaluate the leverage profile of the Macau subsidiary during Wynn Resorts Ltd’s fourth-quarter results call on February 7.

Original story by: GGRAsia