Analysts at Morgan Stanley predict three of Macau\u2019s six casino operators could report negative EBITDA in the first quarter.<\/p>\n\n\n\n\n\n\n\n
Macau.- Morgan Stanley<\/strong> has said it expects Macau’s overall gaming EBITDA to fall 45 per cent quarter-on-quarter to US$73m for Q1. Analysts Praveen Choudhary, Gareth Leung, and Thomas Allen<\/strong> said performance is lower than expected because of poor traffic\/revenue in the second half of March.<\/p>\n\n\n\n They say three Macau operators are likely to report negative EBITDA for the first quarter: MGM China Holdings, which operates MGM Macau and MGM Cotai; SJM Holdings, which owns Grand Lisboa and Grand Lisboa Palace; and Wynn Macau, the operator of Wynn Macau and Wynn Palace in Cotai.<\/p>\n\n\n\n They predict Wynn Macau Ltd’s first-quarter EBITDA loss <\/strong>will be about HK$105m (US$13.4m) but will still be better than market expectations of a negative HK$292m. MGM China’s quarterly EBITDA loss<\/strong> would be around HK$79m, unchanged from the third quarter but better than the consensus estimate of a negative HK$214m.<\/p>\n\n\n\n SJM’s quarterly EBITDA loss<\/strong> is expected to be HK$603m, compared to market expectations of a negative HK$575m.<\/p>\n\n\n\n Analysts said: \u201cWe are assuming operational expenditure to remain flattish quarter-on-quarter. Thus, lower GGR could mean lower EBITDA.”<\/p>\n\n\n\n They added: \u201cOur cash flow analysis shows that companies\u2019 cash can last for eight to 44 months, but that is based on fourth-quarter financials. March\/April 2022 are much weaker, and cash drain is much higher.”<\/p>\n\n\n\n Morgan Stanley said late March that Macau\u2019s casino industry had reported a loss of about US$800m per quarter<\/strong> and a cash flow leakage of about US$250m, with total net debt having grown from US$5bn at the end of 2019 to US$20bn by the end of 2021.<\/p>\n\n\n\n Macau casinos\u2019 gross gaming revenue (GGR) in March was the lowest since September 2020<\/a>, as the Covid-19 outbreak in mainland China continued to restrict travel. GGR was down 52.7 per cent month-on-month<\/a>, from MOP7.76bn (US$963.8m) to MOP3.67bn (US$454.5m).<\/p>\n\n\n\n Sanford C. Bernstein Ltd<\/strong> reported that average daily sales in Macau reached MOP100m in the week ended April 10 week-on-week. That\u2019s a 3 per cent increase on the previous week, but still down 16 per cent when compared to March.<\/p>\n\n\n\n VIP transaction volume was down a mid-to-high 20 per cent<\/strong> compared to March, maintaining a normal rate. Daily mass GGR is down around ten per cent compared to the previous month.<\/p>\n\n\n\nMacau average daily revenue up 3% last week<\/h2>\n\n\n\n