Casino operator Sands China Ltd led the market for the second quarter in Macau, in terms of mass-market and VIP gross gaming revenue (GGR) and hold adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA).
That is according to an analysis in a Tuesday note from banking group JP Morgan, following the completion of Macau’s second-quarter and first-half earnings season, with the interim results of SJM Holdings Ltd.
JP Morgan said that after accounting for differences in terms of the way the Macau regulator and the operators report the mass-market table to VIP GGR split, it estimated Sands China had 24.5 percent of mass table GGR.
Nonetheless, a Tuesday memo from Deutsche Bank Securities Inc estimated that in the second quarter Sands China was a mass market-share “donor” to rivals, judged year-on-year and sequentially.
JP Morgan assessed Sands China had 21.2 percent of VIP table GGR in the six-concessionaire market in the three months to June 30. Deutsche Bank estimated Sands China was a VIP share “gainer” measured year-on-year and quarter-on-quarter.
On the metric of hold-adjusted property EBITDA, JP Morgan said Sands China held a 28.9 percent market share in the April to June period. According to Deutsche Bank, Sands China was a hold-adjusted property EBITDA “donor” to rivals, compared to a year earlier and to the preceding quarter.
Sands China had in late July reported adjusted property EBITDA of US$561 million for the three months to June 30. Such EBITDA was up 3.7 percent from a year earlier, but down 8.0 percent sequentially.
JP Morgan assessed that market-wide in the second quarter, Galaxy Entertainment Group Ltd was in second spot in all three categories: mass table GGR (18.9 percent); VIP table GGR (21.0 percent); and hold-adjusted EBITDA (20.9 percent).
In terms of second-quarter GGR reported by Macau’s Gaming Inspection and Coordination Bureau, the mass market segment – including slot machines – generated revenue of just under MOP43.12 billion (US$5.36 billion). That was 76.4-percent of all GGR for that quarter.
VIP baccarat produced revenue of just above MOP13.31 billion between April and June, accounting for a 23.6-percent share of GGR in the period, as per the government data.
JP Morgan analysts Joe Greff, Samuel Nielsen and Ryan Lambert said in their second-quarter analysis: “Industry-wide GGR was 78 percent of second-quarter 2019 levels – up 2 [percentage] points sequentially.”
They further noted: “Company-reported recoveries relative to 2019 levels for mass table GGR was 116 percent, up 1 point sequentially”.
But VIP was only 23 percent of 2019, though this was “unchanged sequentially,” while slot GGR was 100 percent” of 2019, “down 1 point sequentially”.
The banking group also observed that in the second quarter “reported EBITDA across the operators was US$1.925 billion, 83 percent of second-quarter 2019 levels,” and therefore “unchanged sequentially”.
Carlo Santarelli of Deutsche Bank said that in terms of property EBITDA, “industry margins were 28.2 percent in the second quarter,” versus 29.3 percent in second-quarter 2019, with net revenue “down 14 percent from second-quarter 2019 levels”.
