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January GGR up 3.1 percent, misses expectations

Macau’s casino industry raked in MOP 19.3 billion (US$2.4 billion) in gross gaming revenue in January, according to the latest figures released by the Gaming Inspection and Coordination Bureau.

While the month marked the sixth consecutive monthly increase in GGR, clocking an increase of 3.1 percent year-on-year, the results missed consensus estimates due mainly to a slowdown ahead of Chinese New Year.

“January 2017 felt the full negative impact of the traditional pre-CNY seasonal slowdown. Given the positive trends over the last few months we were hopeful that the traditional slowdown would be somewhat mitigated. This was obviously not the case,” said Union Gaming in a note on Wednesday.

“The implied ADR for the last 9 days of the month (Jan 23-31) was at MOP 506 million, -4 percent lower than the preceding week's ADR of MOP 528mm, and -40 percent lower than the first week's ADR of MOP 838 million,” noted Bernstein.

Union Gaming also noted the growth was further mitigated by unlucky plays at the VIP tables over the first few days of Chinese New Year, which “could have impacted the growth rate by a couple hundred basis points.”

Looking to February, Bernstein says the relatively weak Chinese New Year, added with a strong 2016 CNY comparison would see 2017 February GGR in the MOP20 billion range, representing a +1 percent to +3 percent increase.

In regards to the full year 2017, Fitch Ratings released a note on Wednesday, noting that it anticipates “mid-to- high single-digit growth in gaming revenues in Macau for 2017.”

“Fitch’s 2017 forecast assumptions are anchored by the stabilizing VIP/ Premium mass market, Fitch’s 6.4 percent 2017 GDP growth forecast for China, and the opening of MGM Cotai in second half of 2017.”

On the other hand, the optimism is restrained by China’s renewed efforts to control currency flows and the potential of the cooling of the recently hot real estate market in Tier 1 cities, according to the ratings agency.

Asia Gaming Brief is a news and intelligence service providing up to date market information for worldwide executives on relevant gaming issues in Asia.

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