Macau casinos to report record EBITDA margins in Q2, analysts say

Analysts at JP Morgan estimate that sector-wide EBITDA reached an all-time high of 26 per cent.

Macau.- A report by JP Morgan Securities (Asia Pacific) suggests that Macau’s casino operators could report record earnings before interest, taxation, depreciation, and amortisation (EBITDA) margins for Q2. It estimates that sector-wide EBITDA reached an all-time high of 26 per cent.

The forecast suggests that second-quarter EBITDA for the industry is likely to reach US$1.7bn, a 47 per cent increase compared to the first three months of the year. This estimate represents 73 per cent of the quarterly EBITDA recorded in the same period in 2019, before the Covid-19 pandemic.

Analysts DS Kim and Mufan Shi from JP Morgan say improved margins were driven by a combination of improved revenue mix and cost-saving measures. They expect margins to continue improving, to reach 30 per cent by 2025.

The report highlights that the second quarter of 2023 marked the first time in over three years that every Macau operator, including SJM Holdings, generated substantial free cash flows. Second quarter GGR was MOP45.49bn (US$5.65bn), a 31.3 per cent rise from the first quarter of 2023 and 62 per cent of the GGR achieved in the same period in 2019,

See also: Macau GGR reaches MOP15.21bn in June

JP Morgan estimates that mass GGR jumped by 30 per cent quarter-on-quarter. VIP revenue showed a recover of 25 per cent. Spend-per-visit estimated to be around 30 per cent higher than pre-pandemic levels. Additionally,