VIP results expected to have dropped 35pct y-on-y in 2019 Q4 – Brokerage

Analysts at Morgan Stanley predict that Macau’s VIP gaming revenues will record a 35 per cent year-on-year drop in the last three months of 2019, with mass and slot results to have increased 6 per cent.

Accumulated gross gaming revenue in all of 2019 has totalled MOP292.45 billion (US$36.5 billion), a 3.4 per cent drop when compared to the same period last year, with the last quarter of the year seeing 8 per cent decrease to MOP72.2 billion.

Therefore according to the firm’s predictions, VIP results in the last quarter should amount to US$2.8 billion, with mass and slot to represent some US$5.5 billion.

Morgan Stanley noted that results in the last three months of last year were ‘weaker than normal seasonality’ of more than 5 per cent quarter-to-quarter growth, having recorded a 2 per cent rise to US$2.4 billion.

It also forecasted that negative operating leverage, bad debt provision and higher staff bonuses would likely lead to Macau’s overall EBITDA to have fallen 2 per cent year-on-year, worse than earlier expectations.

‘Even on a hold-adjusted basis, EBITDA is expected to rise only 1 per cent YoY. Sands and SJM are likely to see positive QoQ improvements, while Galaxy should see declines due to higher exposure to VIP,’ a note from Morgan Stanley indicated.