Macau casino profits likely to plunge in Q3

Battered industry: A file picture showing visitors taking a gondola ride at the Venetian Macau resort. Analysts forecast that the third quarter for casino operators will be the worst so far this year. — Bloomberg

MACAU: Casino operators are expected to see third quarter profits slump to US$62mil (RM258.5mil) in earnings before interest, tax, depreciation and amortisation, according to a Bloomberg survey of estimates from eight brokerages.

Analysts forecast that the latest quarter would be the worst so far this year for the world’s largest gambling hub, with the industry’s profit estimate plunging from the US$414mil (RM1.73bil) reported by operators in the previous three months.

SJM Holdings Ltd will likely post negative Ebitda for a seventh consecutive quarter, according to the survey.

MGM China Holdings Ltd, after three quarters of profits, is expected to swing back to a loss.

The industry profit estimate is down 97% from pre-pandemic levels in 2019. Last quarter, it was 83% lower than before Covid-19.

Ebitda Survey Data for Sands China Ltd, Wynn Macau Ltd, Melco Resorts & Entertainment Ltd and MGM China is property Ebitda, while that of Galaxy Entertainment Group and SJM is company Ebitda.

Local Covid-19 flareups driven by the Delta variant and the government’s proposal to tighten its grip over gaming companies have combined to make the third quarter one of the most volatile since the virus first battered Macau’s tourism-reliant industry.

After more than a year of travel resumption with mainland China – the enclave’s largest source of visitors – the city has faced new border restrictions after a resurgence of local clusters in late September.

The travel curbs coincided with China’s National Day holidays, traditionally a peak tourist season for Macau, further damaging the gambling hub’s chances of recovery.

Neighbouring mainland city Zhuhai, Beijing and Hong Kong – only a ferry ride away – now all require quarantine for people travelling from Macau.

The gaming hub also has similar entry requirements for arrivals from Hong Kong and parts of China.

“Sharp deterioration of visitor arrivals during the October Golden Week holiday is unlikely to end soon,” Bloomberg Intelligence analysts led by Angela Hanlee said in an Oct 11 note. — Bloomberg

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