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Macau Casino Profit Seen to Fall as Xi’s Visit Crimped Arrivals

Macau Casino Profit Seen to Fall as Xi’s Visit Crimped Arrivals

(Bloomberg) --

Macau casino operators are expected to show quarterly profit declining about 2.5% when they start reporting results this month, according to analysts’ forecast.

  • Three out of six operators are seen posting year-on-year declines in earnings before interest, tax, depreciation and amortization for the quarter ended December, according to a Bloomberg survey of seven analysts.
  • The past year was particularly challenging for the industry as it faced trade war uncertainty, a slowing Chinese economy, escalating protests in Hong Kong and a crackdown on cross-border gaming that squeezed junkets and the VIP sector.
  • The last quarter was further crimped by President Xi Jinping’s visit. Gaming revenue declined 8% in the quarter compared with a year earlier, according to data from Macau’s Gaming Inspection & Coordination Bureau.
  • Wynn Macau Ltd. is expected to post the largest profit drop due to its higher reliance on the VIP segment. SJM Holdings is seen reporting the strongest earnings growth after they had a financial issue with a satellite casino resulting in a low year earlier comparison.
  • The gross gaming revenue contraction will soften and stabilize in the first half before moving to low double-digit growth in the second half of the year amid improved sentiment following the U.S.-China trade deal, a more stable yuan, and increased liquidity, Bernstein analyst Vitaly Umansky wrote in a Jan. 17 report.
Operator4Q 2019 medianYoY4Q 2018 actual4Q 2019 high4Q 2019 low
-- Property EBITDA
Sands China$799m1.7%$786m$821m$790m
Wynn Macau$334m-15.2%$394m$367m$330m
Melco Resorts$419m-1.4%$425m$457m$405m
MGM ChinaHK$1.53b8%HK$1.41bHK$1.55bHK$1.51b
-- Company EBITDA
Galaxy EntertainmentHK$3.97b-8.3%HK$4.33bHK$4.15bHK$3.92b
SJM HoldingsHK$1.02b21%HK$846mHK$1.1bHK$1b
Industry Total$2.39b-2.5%$2.45bN/AN/A

To contact the reporter on this story: Jinshan Hong in Hong Kong at jhong214@bloomberg.net

To contact the editors responsible for this story: Rachel Chang at wchang98@bloomberg.net, Tim Smith

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