GGRAsia – MGM China 3Q GGR share loss had been expected: analysts

MGM China 3Q GGR share loss had been expected: analysts

Nov 01, 2024 Newsdesk Latest News, Macau, Top of the deck

Macau casino operator MGM China Holdings Ltd lost market share in gross gaming revenue (GGR) during the third quarter, noted a number of brokerages in notes following the results for the three months to September 30.

Though the overall view was that this has been anticipated due to ongoing robust competition for business in the Macau market.

MGM China executives had during the Wednesday call to discuss the third-quarter earnings of the company and its parent MGM Resorts International, emphasised how the Macau business was being refreshed to respond to competitive challenges.

The company, which runs MGM Macau on the city’s peninsula, and MGM Cotai (pictured) in the newer casino district, actually saw its quarterly GGR up 14.9 percent year-on-year, observed analyst Vitaly Umansky of Seaport Research Partners in a Thursday memo.

Such GGR was just under US$1.02 billion, though quarter-on-quarter it was down about 9.6 percent, noted the brokerage.

The quarter saw “both peninsula and Cotai losing share in both VIP and mass [gambling segments], while overall share dropped 140 basis points quarter-on-quarter,” wrote Mr Umansky.

He added: “Player reinvestment accelerated at both properties as event spend and free-play increased to hold on to premium players. Operating expenses increased 5 percent quarter-on-quarter partly due to more event activity.”

Analysts Joe Greff and Samuel Nielsen of JP Morgan Securities LLC had written in a Wednesday memo: “MGM [China] had 15 percent market share during the third quarter, versus its 16 percent during the second quarter and 17.3 percent in the first quarter.”

Colin Mansfield and Connor Parks, analysts at CBRE Credit Research, stated in a Thursday note: “This marked the second consecutive quarter of market share declines for MGM China, though we’ve been expecting this pullback to occur given the market’s competitiveness.”

They added: “Incremental tables and operational adjustments at MGM Cotai are not to be downplayed in MGM China’s [previous] well-deserved share gains.”

Though they added, referring respectively to properties of market rivals SJM Holdings Ltd and Sands China Ltd: “Neighbouring Grand Lisboa Palace is gaining share and The Londoner [Macao] construction is nearing its completion.”

CBRE further noted: “The company has at least one more quarter to show stabilising share before it will likely consider addressing the US$500-million [in] June 2025 maturity” obligations.