Brokerage JP Morgan Securities LLC says it has lowered by 4.3 percent its estimate for third-quarter property level adjusted earnings before interest, taxation, depreciation, amortisation and rent (EBITDAR) for the Macau operations of casino developer Las Vegas Sands Corp (LVS).
U.S.-based Las Vegas Sands is the parent of Macau casino operator Sands China Ltd. The group runs a number of Cotai resorts (pictured), including the Venetian Macao, the Parisian Macao, and the Londoner Macao. It also operates casino hotel Sands Macao on the peninsula.
“We are lowering our third-quarter 2023 property level EBITDAR estimate to US$601 million, down from our prior US$628 million (consensus is US$629 million), primarily to account for a typhoon/weather-impacted September,” wrote JP Morgan Securities analysts Joseph Greff, Ryan Lambert and Samuel Nielsen in a Thursday memo.
Typhoon Saola led Macau’s weather bureau to raise its storm signal to Number 10 – the highest warning signal for tropical storms – on September 2. The bad weather led to the temporary closure of the city’s gaming venues for about nine hours as a precautionary measure, and also disrupted transportation to and from Macau.
Market-wide casino gross gaming revenue (GGR) in Macau reached MOP4.30 billion (US$530.0 million) in the first 10 days of September, according to analysts’ estimates.
In Thursday’s memo, the JP Morgan Securities team said: “We now expect market-wide GGR to come in at MOP14 billion for September (down 18 percent month-on-month) and MOP48 billion for the third-quarter 2023 (up 5 percent quarter-on-quarter), and for Las Vegas Sands to achieve similar market share in the third-quarter 2023 as it did in the second quarter of 2023.”
“We are also taking a more conservative approach to our fourth-quarter 2023 Macau EBITDAR forecast, now projecting US$670 million, down from our prior US$727 million,” stated the analysts, in a reference to Las Vegas Sands’ Macau operations.
“In 2024, we project property level EBITDAR of US$2.9 billion, down from our prior US$3.1 billion, given a lower base in 2023 and far less aggressive margin assumptions,” they added.
The brokerage also said its estimates for Las Vegas Sands’ operations in Singapore – where it runs the Marina Bay Sands casino resort – remained “unchanged” for the second half of this year and for 2024.
Sands China achieved adjusted property EBITDA of US$541 million in the second quarter of 2023. At Marina Bay Sands, quarterly adjusted property EBITDA reached US$432 million, up 35.4 percent in year-on-year terms.
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