GGRAsia – Macau 2Q EBITDA likely up 29pct y-o-y: Nomura

Macau 2Q EBITDA likely up 29pct y-o-y: Nomura

Jul 10, 2017 Newsdesk Latest News, Macau, Top of the deck

Japanese brokerage Nomura thinks that market wide, second-quarter Macau casino earnings before interest, taxation, depreciation and amortisation (EBITDA) went up by 29 percent year-on-year to US$1.73 billion. Second-quarter earnings report season for the six Macau licence holders begins soon.

Its forecast contained in a Monday note, was on the assumption there had been an 18-percent year-on-year increase in mass gross gaming revenue (GGR) and a 27-percent year-on-year increase in VIP GGR for the second quarter.

Macau’s casino regulator Gaming Inspection and Coordination Bureau, also known by its Portuguese-language acronym DICJ, is due to release later this month the data giving the official split between the city’s mass-market and VIP-segment gaming revenue for the three months to June 30.

Nomura’s current full-year industry EBITDA estimates for 2017 and 2018 are respectively 1 percent and 4 percent below market consensus, according to its Monday note.

“In the past few quarters, VIP improvement has been heavily concentrated to Wynn [Macau Ltd]. For the VIP recovery to be sustainable, we will expect the VIP growth to be more spread out,” the Nomura analysts wrote.

In the same memo, the institution said that for more insight on full-year trends in Macau market share in the mass gambling segment, it would monitor the ramp up of the recently-opened Parisian Macao and Wynn Palace – promoted respectively by Sands China Ltd and Wynn Macau Ltd – and the impact from recently-completed upgrades of facilities at Galaxy Macau, promoted by Galaxy Entertainment Group Ltd and MGM Macau, operated by MGM China Holdings Ltd.

In the second quarter, Macau’s casino GGR of all stripes reached nearly MOP62.90 billion, up by 21.9 percent year-on-year, according to data from DICJ. The Macau market GGR tally for the first half of 2017 stood at MOP126.38 billion, up 17.2 percent from the prior-year period.

In a note released last week, Nomura said it expected Macau quarterly GGR growth to decelerate to 15 percent in the third quarter and then to 8 percent in the fourth quarter of 2017.