I am pleased to report a solid set of financial figures of the Group for the year ended 31 December 2018. The year 2018 was an exciting year and the Group performed admirably against the challenging environment in the pursuance of our goal to become a worldwide leading gaming technology company. During the year under review, the Group successfully developed new slot machines and ETG products, and provided timely solutions and support to casinos in Macau for the compliance of the requirements under the Technical Standards. Despite uncertainty in the global economic environment and intensified competition in the Macau gaming industry, we managed to turn last years’ bottom-line losses into a profit in 2018. Our two casinos under management continued to be the synergistic bond between our two principal business segments — the casino management services segment and the gaming equipment and systems segment. In 2018, GGR derived from the casinos under our casino management services segment increased by 9.8% year-on-year whereas the total revenue for our gaming equipment and systems segment increased by 156.7% year-on-year.
With improving infrastructure and newly opened world-class entertainment facilities in Macau, the city has undergone structural transformation into a mass-centric destination. Macau’s visitation grew by 9.8% year-on-year to a record high of 35.8 million in 2018. Same day visitors grew nearly 12.7% on a yearly basis, outpacing the growth of overnight visitors which increased by 7.2%. In addition, Macau’s total VIP GGR as a percentage of Macau’s total GGR decreased from 56.7% in 2017 to 54.8% in 2018. The paradigm shift of the Macau gaming industry from VIP to mass has been observed citywide, including the two mass-focused casinos under our management. In particular, Casino Kam Pek Paradise has gained increasing popularity among mass gaming patrons. The abundance of LMG machines in the casino offers a more affordable way of gaming for mass market visitors who might not have otherwise been able to experience in other casinos’ traditional tables. Casino Kam Pek Paradise has positioned itself as a unique gaming business model to support our belief that investment in gaming technology could help optimise table yields. We will continue to focus on optimising table productivity in the casinos under our management by applying cutting-edge gaming technology that has enabled our GGR per table per day in the mass to rival the tables in other casinos in Macau.
The Group saw a solid replacement demand for LMG machines in 2018 primarily due to the promulgation of the Technical Standards by the DICJ. Sales of other complementary LMG products such as the X-Stadium Live were also boosted. Moreover, the Group has recently developed new ETG machines and slot machines. Some of these machines have already undergone the final testing stage and will soon debut in the market. The successful launch of a wider range of products fuelled the Group to become a diversified, internationally-recognised gaming equipment and systems provider.
I am also grateful to the Macau government for their leadership and vision to continually support local enterprises in the Policy Address 2019. As a home-grown Macanese brand, the Group is always committed to support the Macau government to further enhance the appeal of Macau to the local and global markets. This year, I am also delighted to witness the opening of the Hong Kong-Zhuhai-Macao Bridge, the world’s longest bridge, such that visitors who have not previously considered Macau as a short-term destination are now pouring into Macau. This bridge integrates the Greater Bay Area including Macau and Hong Kong into one single connected trip and has driven visitation to Macau to new heights. We will continue to support the Macau government’s vision on developing Macau as the “World Centre of Tourism and Leisure” as part of the Greater Bay Area development plan. I have every confidence that Macau is and will continue to be the world’s major gaming jurisdiction. With improving infrastructure, more mass gaming patrons are prepared to visit Macau for leisure, which would in turn benefit our mass-centric casinos as well as the deployment of our gaming equipment and systems.
Finally, on behalf of the Board, I would like to extend my sincere gratitude towards our Shareholders, banks, customers and business partners for their continuous support of the Company. Furthermore, I would also like to thank our executives and staff for their dedication and professionalism so that the Company continues to thrive.
Chairman and Managing Director
Hong Kong, 26 March 2019