“Strong recovery” in Macau’s mass gambling market “will support faster deleveraging for rated issuers,” says a Tuesday note from S&P Global Ratings.
“We expect the improvement in EBITDA [earnings before interest, taxation, depreciation and amortisation] for rated issuers will accelerate over the next several quarters due to increased Macau visitation and greater availability of hotel rooms in the market,” stated the institution.
There are six gaming concessionaires in the Macau market, with all of them having started new 10-year public concessions in January 2023. S&P Global rates four of the city’s casino operators: Sands China Ltd; Wynn Macau Ltd; MGM China Holdings Ltd; and Melco Resorts (Macau) Ltd, the concession-holding entity of Melco Resorts & Entertainment Ltd.
S&P Global forecasts rated issuers’ EBITDA will be about 95 percent of 2019 levels in 2024, on average.
“This is except for MGM China, which is outperforming the market largely due to incremental tables awarded” to it by the Macau government, noted S&P Global.
Singapore-based Lucror Analytics said in a recent note that it expected SJM Holdings to have a “deleveraging trajectory” with a pace “slower than… its peers” in the Macau market.
S&P Global currently expects that market-wide in Macau for 2024, mass-segment casino gross gaming revenue (GGR) will be “5 percent to 15 percent” above the pre-Covid trading levels of 2019, “implying 20 percent to 30 percent growth year on year”.
Strong momentum in the mass market would be mainly due to growth in the premium segment, suggested S&P Global.
Though it added: “We project base mass will grow during 2024 as more people visit Macau, in line with a recovery in air passenger capacity to Macau and Hong Kong.”
It stated that junket-based VIP play volume would “likely stay near current levels”.
The institution added: “Operators are unlikely to significantly expand junket VIP operations amid tightened regulations.”
