Gaming Revenue slightly picks up, yet still subdued
The city’s gross gaming revenue has likely reached MOP2.1 billion from April 1 to 24, mainly due to the further relaxation of the nucleic acid test (NAT) validity, which also led to an increase in visitor arrivals over the weekend.
The recorded figure implies a daily run-rate of MOP83 million, 11% higher than the MOP75 million recorded the week before, brokerage Sanford C. Bernstein estimated.
Early this week, the validity of NAT results for border-crossing purposes was extended to 72 hours, allowing the tourism sector to expect hotel occupancy rates to reach 60% over the coming Labor Day holiday period.
“Despite the rebound, visitation and revenue remains largely subdued due to [mainland] China Covid-19 outbreaks and restrictive travel and border control,” wrote analysts Vitaly Umansky and Louis Li, as cited in a report issued by GGR Asia.
Previously, analysts have forecasted that the recovery of the gaming sector is likely to be further delayed. The upcoming holiday is a potential catalyst for the gaming industry, as well as for SMEs. Therefore, the new measure easing border restrictions comes as good news for the downturned sector.
Bernstein previously expected the April’s GGR to record a 13% drop compared to March revenues, which was MOP3.67 billion – a 55.8% tumble compared to figures recorded in February.
Meanwhile, Morgan Stanley has estimated that MGM China, SJM Holdings and Wynn Macau gaming operators are likely to post negative earnings before interest, taxes, depreciation, and amortization (EBITDA) during the first quarter of this year.
In a recent report, the investment bank JP Morgan wrote that it expects that SJM Holdings runs the risk of seeing its financial liquidity exhausted within half a year, taking into account the delay in the refinancing plan of the company amid the impact of the pandemic:
“From a financial point of view, our analysis suggests that SJM Holdings has only about six months of liquidity, which is by far the shortest [among Macau gaming operators],” warn analysts DS Kim, Amanda Cheng and Livy Lyu. LV
