Analysts: EBITDA grows 7-8% in Q1 despite margin pressures

Macau’s casinos posted first-quarter EBITDA growth of 7% to 8% year-on-year, trailing the city’s 14.3% gross gaming revenue (GGR) surge due to unfavorable VIP-to-mass player mixes and reinvestment pressures, analysts at Citigroup and CLSA Ltd. said in reports issued Monday.

GGR hit MOP65.87 billion (USD8.16 billion) in the January-March period, the strongest daily run-rate since the city’s post-COVID reopening.

CLSA’s Jeffrey Kiang projected industry EBITDA at $2.067 billion, up 7% from last year, aided by 14% revenue growth but hampered by margins slipping to 25.3%. He wrote, “Despite certain one-off OPEX in the fourth quarter of 2025, margin will likely remain under pressure due to the ongoing premium-driven gaming revenue.” The analyst added that VIP win rates “will unlikely exceed the normal levels of circa 3.0 to 3.3 percent.”

Meanwhile, Citigroup’s analysts George Choi and Timothy Chau echoed a similar outlook, forecasting 8% EBITDA growth that felt “largely flat” quarter-on-quarter. The Citi duo attributed the lag to “the less favorable VIP/mass GGR mix” and “less favorable VIP hold, which hurt margins.”

Nonetheless, Citi’s analysts remarked that margins held at a “respectable level of around 27 percent,” adding that “player reinvestments remain reasonable.”

Choi and Chau emphasized, “The positive GGR and EBITDA growth during the [first] quarter should remind investors that players’ appetite for gaming seems to be little affected by the ongoing geopolitical tensions and economic uncertainties.” They also noted that these tensions refer to events outside the Asia-Pacific region.

“Gaming performance can vary between periods due to normal fluctuations in hold percentage and customer mix,” the Citi analysts wrote.

Operator

performances diverge

Sands China Ltd. led with the strongest gains, its EBITDA potentially up 20% to $643 million, per both firms. Citi highlighted Sands’ quarter-on-quarter market share rise to 25.5% – a 0.8-point gain – and an easy comparison, since The Londoner Macao at The Londoner Macao resort wasn’t fully open in Q1 2025. CLSA pegged Sands’ EBITDA share at 30.5%, with a 2.2-point sequential jump.

SJM Holdings Ltd. lagged as the weakest performer among the six operators, with Citi projecting a 6% EBITDA drop to $115.3 million.

On market share, Melco Resorts & Entertainment and Wynn Macau appeared as making the strongest quarter-on-quarter gains. Melco climbed to 15.7% from 14.2% in the previous quarter, boosted by entertainment-driven visitation including Studio City events.

Wynn Macau rose to 13.4% from 12.2%, though Citi said performance could have been higher under normalized VIP hold. Galaxy Entertainment, MGM China and SJM saw sequential declines.