Macau companies EBITDA to break even in Q1

Analysts at Morgan Stanley said they expect Macau’s gaming concessionaires to announce almost breakeven EBITDA in the first quarter of 2020, reflecting a strong January before the COVID-19 outbreak.

According to the analysts, Galaxy and Sands are expected to report positive EBITDA, due mainly to retail rental and construction material business, which are less affected by casino closures. Melco will have also seen benefit from the closure of the City of Dreams Manila at the end of March (as opposed to Macau closures in February). However, MGM and SJM are expected to report negative EBITDA due to higher fixed costs at Cotai. 

Last month, the Gaming Inspection and Coordination Bureau reported GGR of MOP72.2 billion (US$9 billion) for the 20Q1, down 60 percent year-on-year. 

Morgan Stanley analysts estimate VIP fell 56 percent year-on-year, while mass fell 64 percent year-on-year - a trend that is expected to continue until the end of the year. 

Looking ahead, Morgan Stanley expects the majority of demand to come back to Macau in 2021. 

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