Brokerage CLSA Ltd thinks most of Macau’s casino concessionaires will pay dividends in 2025, with the sector’s total dividends estimated to grow 20 percent year-on-year to US$1.5 billion.
That was on the basis of operators’ robust cash flow as well as an assumed improvement in confidence among China’s consumers. The exception regarding dividends among Macau’s six operators, might be SJM Holdings Ltd, said the institution.
“We forecast the sector’s total dividends to grow 20 percent year-on-year, to US$1.5 billion in 2025 as we pencil in resumption of dividends by Sands China [Ltd] and Melco [Resorts & Entertainment Ltd],” wrote CLSA analysts Jeffrey Kiang and Leo Pan in a Friday report offering a 2025 outlook for the Macau industry.
This was as revamp work at Sands China’s The Londoner Macao sees the property’s business ramp up, with “Phase 2… fully complete in April 2025″.
Though they added that market-wide: “Aggregate dividends are still 60 percent below 2019’s level.” That was a reference to the trading year before the Covid-19 pandemic.
“We expect [China’s] consumer confidence to only pick up in the second half of 2025 at the soonest,” the CLSA analysts added, saying that was likely to be linked to expectation that China’s property prices “stabilise”. Such improvement could also help 2026 growth in Macau gross gaming revenue (GGR).
For Macau names, “we think a higher dividend payout ratio is justified in 2025 as our forecast dividend payout (from free cash flow) is 36 percent in 2025 (was 91 percent from 2016 to 2019),” CLSA noted.
The other three 2025 dividend payers would be Galaxy Entertainment Group Ltd; MGM China Holdings Ltd; and Wynn Macau Ltd.
Capital expenditure on some Cotai venues could see Macau-industry overall dividend payout from free cash flow to equity, “decline from 45 percent in 2024 to 36 percent in 2025,” said the brokerage.
This would be “below the 91 percent from 2016 [through] to 2019”.
The CLSA team added: “There is room for higher dividend payout in 2025” since Galaxy Entertainment was the only concessionaire with new projects coming online in 2025, namely a new luxury hotel, Capella at Galaxy Macau, and in 2027, Galaxy Macau Phase 4.
In 2024, Macau casino concessionaires have been “more shareholder-friendly” than previously, on returning cash, despite “minimal breakthrough” in GGR growth, CLSA remarked.
Year-to-date, the six Macau gaming concessionaires were tracking to return US$992 million to shareholders via dividends and buybacks, including the final dividends for 2023 that were declared in the first quarter of this year.
The city’s 2025 GGR should grow 4.0 percent year-on-year to US$29.3 billion, supported by greater volume of visitors, the Friday memo noted. For 2026, CLSA expects GGR to track growth of circa 10 percent year-on-year to US$32.4 billion.
The brokerage assumed a “seasonally low” average GGR per visitor at MOP6,043 in the third quarter this year, but thinks that will have improved to MOP6,330 in the current quarter and to MOP6,483 in 2025.
CLSA forecast Macau’s gaming sector earnings before interest, taxation, depreciation and amortisation (EBITDA) to reach US$7.9 billion for full-year 2024 – a level that would, if realised, represent 82 percent of 2019 level. The brokerage also forecast sector EBITDA to be US$8.5 billion in 2025 and US$9.4 billion in 2026.
“While we forecast gaming revenue growth in 2026 and raise our non-gaming revenue assumptions, we expect EBITDA margins in 2025 and 2026 to stay capped at 27 percent to 28 percent as a function of operation costs growing in line with our revenue growth assumptions,” said the analysts.
