MACAU – Six casinos to post US$3.4 billion Y/Y downturn
Casino operators prepare for worst ever report as Q2 2020 down by 96%
Macau’s six operators are likely to post the worst quarterly performance ever in Q2, with the focus likely to be on who has done the most to control operating expenditures during the period, Morgan Stanley reports in a note.
With Macau’s borders closed on extended China government COVID-19 prevention, casino operators’ Gross Gaming Revenue (GGR) in Q2, the three months to end June, was down 96 percent, as reported by Morgan Stanley analysists, adding that all Macau’s six operators face the worst quarterly performance ever in 2020.
Needless to say, the focus to improve GGR is likely to be controlling operating expenditures, during the period and in the months to come. On average, daily operating expenses for the six companies have been reduced by 21 percent year-on-year and 5 percent from the prior quarter to about US$15 million.
MS adds:”The biggest percentage decline was seen at SJM Holdings, with a 29 percent drop from last year to US$1.3 million. The smallest reductions were seen at Galaxy Entertainment and Melco Resorts & Entertainment, with both expected to have trimmed costs by 17 percent to US$2.9 million and US$2.2 million respectively.”
In terms of EBITDA, the operators are expected to post a loss of US$1 billion, compared with a profit of US$2.4 billion in the same period a year earlier.
Morgan Stanley expects Macau GGR to decline 55 percent in 2020 before rebounding by 90 percent next year.
