According to Sanford C. Bernstein, Macau is already achieving breakeven EBITDA due to a recovery in mass and non-gaming.
Macau.- The gaming industry is already achieving better than breakeven EBITDA at current revenue levels, according to a report by analysts at Sanford C. Bernstein on the first results from 2021.
The brokerage recently reported that the first 10 days of January saw some MOP2.85bn (US$357m) in gross gaming revenues, at an average daily rate of MOP285m. That represents a 68 per cent fall year-on-year but a 13 per cent rise when compared to December 2020.
Now, it says that a recovery in mass and non-gaming has helped EBITDA cross the breakeven point.
It said: “In the early stage of recovery, we expect operators who have outsized relative positions in premium mass to fundamentally outperform (Melco and Wynn Macau top picks) over the next 6+ months, as premium customers are less affected by the economic impact related to COVID-19 and fewer numbers of customers are necessary to drive GGR growth.”
It added: “These operators have also shown relative underperformance over the past year and should see relative improvement. Sands and Galaxy will also benefit from their expanded focus on premium mass over the next year”.
As previously noted by the brokerage, the last quarter of the year 2020 saw an improvement on the previous quarter, with mass casino gaming results including slot machines increasing by 458 per cent to MOP14.2bn and VIP baccarat results, which represent most of the high-end gambling, increasing by 225 per cent quarter-to-quarter to almost MOP21.8bn.
The report adds that mass-market games including slot machines provided 65.1 per cent of all Macau’s gross gaming revenue, a record high.