Macau operator, optimistic on financial projections

Melco CEO Lawrence Ho remains confident the Macau casino industry will post “decent growth” in 2019, despite brokerages forecasts.

Macau.- Brokerages in Asia have forecasted poor GGR growth for the Macanese casino industry, but operators remain confident. Chairman and CEO of Melco Resorts and Entertainment Ltd Lawrence Ho Yau Lung assured he remains confident of “decent growth” in the area and was optimistic about Melco even as Macau financial pr.

“Look, it is not going to be as great as 2018 – 2018 blew everybody’s expectation at a 14% growth,” he said about GGR. “For us as a company, Melco, we care more about the underlying cash flow and EBITDA, and I think the quality of the cash flow is better now then it’s ever been.”

According to Mr Ho, Melco is “if not the least-reliant, then the second-least reliant on VIP business.” He also added: “All mass business is very strong. And we have been focusing on premium mass. So far, I think we’re having a good year.”

Negative forecasts

Macau financial projections for the casino industry are not very encouraging and have turned even worse. Bernstein analysts have lowered their GGR growth estimates for March due to lowered mass and VIP volume over the last week.

The brokerage showed Macau GGR MTD was €16.9 billion with MTD ADR of €700 million. The figure is 12% lower than from February’s and was down 5% from 2018’s same period, caused by several large-scale junket events that elevated VIP GGR in March 2018.

Bernstein explained it lowered its estimated GGR growth for the Macau casino industry in March from -6% to -5% year-on-year. The negative change includes lowered mass volume at mid-single digits and lower VIP volume at high teens.

According to Instinet, a division of the Japanese company Nomura, Macau casino gross gaming revenue (GGR) may be flat or worse by the end of March, with a -5% projection in the worst case scenario.