Macau casinos likely to end 2022 with US$800m in EBITDA losses

SJM and MGM China are expected to see the biggest falls.
SJM and MGM China are expected to see the biggest falls.

Analysts at JP Morgan Securities predict that Macau casino operators will end the year with nearly US$800m in EBITDA losses due to the most recent Covid-19 pandemic outbreak.

Macau.- Analysts at JP Morgan Securities have published a report estimating that Macau casino operators will end the year with approximately US$800m in EBITDA losses due to the most recent outbreak of Covid-19 cases, which began almost a month ago.

The brokerage had previously predicted EBITDA of US$991m and a GGR of US$7bn. However, analysts now predict that Macau’s casino gross gaming revenue (GGR) will reach only 19 per cent of 2019 levels this year. They expect 2023 GGR could rebound to 40 per cent of pre-pandemic levels. In 2019, Macau reported full-year gross gambling revenue of MOP292.4bn (US$36.1bn).

On July 11, all non-essential business operations, including casinos, closed their doors. Casinos were to remain closed until yesterday (July 18), but the government has extended the closure until Friday July 22.  

The brokerage company noted that with no revenue, the gaming industry cash burn could be as high as US$2.2bn. Since 18 June, Macau has recorded 1,765 Covid cases. Authorities reported 10 new confirmed cases in the last 24 hours.

JP Morgan had previously said it believes casino operators SJM Holdings Ltd and Sands China Ltd currently have a minimum nine-month liquidity runway through March 2023.

Wynn Macau Ltd, MGM China and Melco Resorts currently have “a year and a half to two years of liquidity” – enough to “weather through zero revenues until mid-2024”. Galaxy Entertainment Group Ltd, has five years’ liquidity, according to the analysts.

In this article:
Covid-19 Macau casinos