2016 was a transformation year for both the Group and the Macau gaming market. Our management team has successfully executed the business strategies and we achieved solid results on the back of a challenging operating environment as the Macau gaming market coped with the economic and regulatory concerns in China.
The macro headwind is coming to an end. Macau’s GGR has indicated a recovery from the third quarter of 2016 and continued to perform well into early 2017. We strongly believe in the long-term growth prospect of the Macau gaming market, particularly in the mass gaming segment as infrastructure improvements such as the Hong Kong-Zhuhai-Macao Bridge and the Macau Light Rapid Transit will continue to drive growth.
The Group’s revenue increased by 6.5% year-on-year to HK$1,163.3 million in 2016 (2015: HK$1,092.1 million), while Adjusted EBITDA increased by 40.1% to HK$97.5 million (2015: HK$69.6 million). In 2016, for our gaming system segment, we saw remarkable demand of our flagship product – LMG terminal. We achieved a record breaking LMG terminal deployment in Macau and overseas markets in 2016.
In April 2016, the Group entered into a strategic agreement with IGT, a global leader in electronic gaming machine industry. The Group assigned and licensed the Patents and associated technology to IGT to receive a one-time non-refundable and non-creditable upfront payment of US$12.95 million (equivalent to approximately HK$101.01 million) and a 15-year earn-out payment for every Live ETG or RNG ETG machine deployment in the global market (other than Macau). With IGT’s experience and global sales network, we can accelerate our ETG machines deployment into other international markets.
It is also important that the Group retains flexibility to take advantage of any opportunities arising in the dynamic gaming industry. The Group has a healthy balance sheet, with cash and cash equivalents of HK$370.8 million and net cash (being cash and cash equivalents less borrowings) of HK$279.0 million as at 31 December 2016. We will continue to look for potential opportunities in Macau and elsewhere to expand our business and increase our market share in the gaming industry.
Last but not the least, on behalf of the Board, I would like to thank the Shareholders, our banks, customers and other business partners for their continuous support. Most importantly, I would also like to take this opportunity to thank our executives and staff for their dedication and professionalism.