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UBS has raised its gaming estimates for the mass market for 2018 to 18 percent from 17 percent previously, though adds the sector is likely to be the most affected by the government’s confiscation of China UnionPay point-of-sale terminals.
The coming Chinese New Year period may see more hotel rooms booked compared to the previous year, say analysts. Last year, 930,000 Chinese visitors entered Macau during the seven-day holiday period. Bernstein says it expects occupancy and ADR during the period to be higher than last year comparatively – with a greater number of Chinese […]
Casino operator Wynn Macau saw its net profit increase more than 300 percent in the fourth quarter of 2017, reaching $187.2 million, according to a results release on Monday. Total revenue from the Macau arm reached $1.3 billion in the quarter, compared to only $917.1 million recorded in the year before, while adjusted property […]
While 2017 saw strong VIP recovery, the VIP model is likely to face headwinds going into the second half of 2018, said Bernstein in a Friday note. The firm estimates VIP growth to reach 8 percent in 2018, compared to an estimated 26 percent growth in 2017. Mass however, should remain a secular long-term low […]
UBS analysts are lowering their Singapore GGR estimate by 16 to 17 percent, mainly due to weaker VIP trends. In a note on Tuesday, the brokerage said they are expecting gaming revenue to decline 12 percent this year, and expects the Singapore VIP gaming market to decline 29 percent in 2016, while mass revenue is […]
Revenues on the Las Vegas strip fell 5 percent year-on-year in October, though mass volumes held up gaining one percent. The revenue for the month was $494 million. Revenue was hit by lower than normal hold on baccarat tables and the timing of collections weighing on slot win, analysts said October baccarat volumes were down […]
Macau’s Studio City delivered a solid opening as the new Hollywood-themed casino unveiled its non-gaming amusements, UBS said, and though not housing any junket business currently could see some VIP operations in the future. Along with showcasing the premiere of a star-studded short movie, The Audition, and its Batman Dark Flight ride, Studio City unveiled […]
UBS has revised down its gross gaming revenue estimates for Singapore, expecting GGR to drop 11 percent year-on-year compared with 5 percent, due to weaker VIP trends. In a note, UBS analyst Robin Farley said the Singapore VIP gaming market is expected to decline 26 percent in 2015 compared with expectations of a 16 percent […]
Las Vegas Strip revenues were down 16 percent year on year in June to $446 million, results that are “moderately disappointing,” said Wells Fargo. Analyst Cameron McKnight wrote in a note that the comparison between the year on year results was very challenging as last June’s baccarat set an all-time record for the month for […]
Macau gross gaming revenue fell 37.1 percent in May to MOP 20.3 billion ($2.5 billion), making a full year of monthly declines, according to official figures. The data from the Gaming Inspection and Coordination Bureau compares to GGR being down 37 percent YoY in 15,Q1 and down 39 percent YoY in April, Daily average gaming […]
Las Vegas strip gaming revenues rose 7.8 percent year-on-year in April, while underlying gaming revenues excluding baccarat were up 8.4 percent for the month, above UBS’ low single digit expectations for Vegas for the year, the research house said. UBS analyst Robin Farley said in a note that April’s overall market gaming revenue growth […]
The Macau government has granted 150 new tables to Galaxy Macau phase 2, a number in line with what the industry expected after 200 plus tables seemed unlikely, said UBS. UBS analysts in a note said they maintain that the number of gaming tables has not been an operational constraint for growth for the industry […]
Gaming revenues for Vegas Strip casinos in March fell 9.6 percent compared to the year before, with roughly half of the drop driven by baccarat, a result that’s not as bad as it looks, UBS wrote in a note. Excluding baccarat, underlying revenues were down 4 percent for the month, still below the research house’s […]
Wynn Resorts’ large dividend cut from $1.50 per share to $0.50 in the first quarter following dire financial results from its Macau arm reflect a cautious outlook for Macau, UBS says. Wynn Resorts, which cut its quarterly dividend to $0.5 from the previous quarter, announced that its Macau operation reported property EBITDA of $212 million, […]
Overall visits to Macau in March dropped 14 percent year-on-year while visitors from Mainland China fell 18 percent, a reversal of the growth trend seen in January and February, according to official data and analysts. UBS analysts Anthony Wong and Angus Chan wrote in a note that despite visitation statistics going backwards visitor numbers do […]
UBS Securities said it expects 15Q1 EBITDA to drop 40 percent year-on-year and 15 percent quarter-on-quarter, a steeper drop than GGR which fell 37 percent YoY and 14 percent QoQ. UBS analyst Anthony Wong wrote in a note that by segment, underlying VIP revenue dropped 19 percent QoQ and 45 percent YoY, while mass revenue […]
UBS Securities has revised down its 12-month price target for Crown Resorts by more than 10 percent to $16.60 a share from $18.45 previously, reflecting lower earnings from its Macau joint venture, Melco Crown. The revision follows a note last month by UBS analysts who said weak first quarter revenue in 2015 and slower sequential […]
As Macau’s gaming sector gets ready to enter a supply boom in mid-2015, UBS says the sector needs 8 percent growth in gross gaming revenue per year for new projects to achieve substantial EBITDA. “Based on our 2015 GGR (-21%) forecasts, our scenario analysis shows that the sector needs an 8% GGR CAGR in 2016/17/18 […]
UBS said it expects further downside revisions to Macau’s gross gaming revenues amid continued pressure on high-roller gaming due to uncertainty over junket regulations and a full smoking ban. UBS analyst Robin Farley said Macau market GGR has been revised to negative 21 percent in 2015, positive 8 percent in 2016 and positive 11 percent […]
SunCity will be enlarging its footprint in Manila soon, with fixed room operations in City of Dreams and Bloomberry’s Solaire Casino, UBS analysts said in a note. The group will commit to a total of 42 tables in the two casinos and plans to invest a total of HK$1 billion ($128.8 million) in initial cage […]
As the first quarter comes to a close, there seems to be little reprieve for Macau’s battered casino stocks, with analysts continuing to cut estimates on the back of weak Chinese New Year revenue and an ongoing stream of negative news. Although the February fall in gross gaming revenue was the worst on record at almost 49 percent, it wasn’t as bad as some had been expecting. Still the consensus is that the market has not reached a bottom as yet. Comments from both analysts and operators continue to reflect longer-term optimism, but agree there remains little near-term visibility. “February was very weak especially given Chinese New Year and a lot of analysts are revisiting their forecasts,” said Alex Bumazhny, an analyst at Fitch Ratings, which this week predicted a 4 percent decline for 2015 GGR. “The market is banking on a slow down in premium mass and on the whole it’s not looking so good for 2015.” It’s also unclear as to whether the regional operators which saw a sharp uptick in Q4 VIP revenue as high rollers fled Macau, will continue to benefit as China pledges no let up in its anti corruption drive. JP Morgan in a recent report cut its earnings and share price target estimates by 25 percent and said it now expects an 18 percent decline in 2015 GGR, while Deutsche Bank issued perhaps the most bearish forecast so far, predicting a 30 percent drop and slapping a sell rating on the Macau five operators apart from SJM Holdings, which was already rated sell. JP Morgan said it doesn’t expect a pick up in share valuations until April, pointing also to a series of regulatory overhangs in the market. Deutsche Bank says the GGR decline may extend into 2016. The Macau government will conduct an interim review of the gaming sector this spring and may provide more clarity on new table allocations to casinos. It is also likely to discuss the issue of inbound mainland visitors with Beijing and whether their movements will be further restricted. The government last year clamped down on transit visas to third country destinations and has said it may review the Individual Visa Scheme. “We believe the market would not give the benefit of the doubt, until such regulatory issues are proven to pass without any significant surprises,” the bank said. Citi is more upbeat, saying it believes the market may be at a turning point, but still sees no signs of recovery in the VIP sector. The firm recently cut its forecasts for 2015 market GGR to negative 16 percent, from its prior estimate for a drop of 4 percent. The Q1 results will follow on from a set of financial statements for Q4 that, while gloomy, were largely in line with expectations. “The results were more or less consistent with what we expected,” Fitch’s Bumazhny said. “Wynn lost some market share and that appears to have continued in Q1 which is a concern.” Wynn Macau, which currently has just one highly VIP focused property, posted the biggest drop in quarterly revenue so far. (Galaxy Entertainment will report on March 19th and SJM Holdings didn’t split out Q4 figures). Net revenues were $761.2 million, a 32 percent decrease from the $1.12 billion generated in the fourth quarter of 2013. Adjusted property EBITDA in the fourth quarter of 2014 was $241.2 million, down 35.5 percent. VIP turnover was down almost 40 percent, however the group has been renovating its casino floor which resulted in a drop in VIP tables to 244 in Q4 from 273 in the prior year. That renovation, which includes the addition of two VIP rooms and a new relationship with top junket operator Sun City, was scheduled for completion ahead of the Chinese New Year. Despite the weak Q4 for Wynn, analysts are generally reasonable bullish about its outlook. Sterne Agee’s David Bain wrote in a recent report that his buy recommendation on the stock remains intact and that investors have given little credit for its renovations and still less “to a top tier junket operator occupying one of its rooms that currently does not do business at its facility.” Bain and analysts at Citi also pointed to the fact that the opening of its new Wynn Cotai will be transformational for the company. Citi said the new property is likely to be the “premier” resort on Cotai, although the company indicated in its Q4 earnings call that the opening may be delayed. MGM China’s Q4 was also weaker than most had expected. Revenue fell 22 percent to $719 million, while adjusted EBITDA dropped 22 percent to $185 million. Like Wynn, MGM also cut Macau VIP tables in the quarter to 195 from 235. VIP table games revenue dropped 39 percent, while mass floor revenue jumped 19 percent, reflecting an increase in main floor games up to 228 from 195. UBS analyst Robin Farley points out the mass performance in the quarter was “impressive,” above the firm’s 18 percent growth forecast and the market consensus for a drop of 16 percent. The group said it remains on schedule for the planned opening of MGM COTAI in 2016. The expected total development cost is approximately HK$23 billion, excluding land costs and capitalized interest. It also announced plans to spend $100 million on revamping the main floor at its existing MGM Macau. Sands China as expected benefited from its bias towards the mass market and its higher capacity than other operators. Total net revenue declined 16.2 percent in the quarter to $2.12 billion, while adjusted property EBITDA decreased 14.7 percent to $713.2 million. Mass revenue was down 9 percent, while premium mass was down 17.5 percent. VIP volume was down 42 percent. “In Macau, we like its peer-high weighting to mass gaming (higher visibility and margins than VIP), peer-high hotel room capacity amidst strong visitation growth and gaming position lead in Cotai,” Sterne Agee’s Bain said. The company noted on its earnings call that there is room for improvement to its Q4 margin of 34 percent going forward, as the drop in the mass market was so rapid towards the end of the year that it had not had time to adjust expenses. However, analysts also noted that the company is no longer giving a specific time frame for the opening of its Parisian Macau resort, saying that the target remains “sometime in 2016.” UBS’ Farley says that the U.S. casino giant will need the Macau government to approve more labor to achieve that date. Melco Crown saw its Q4 revenue drop 20 percent, although again analysts are slightly more upbeat about the company’s prospects given the opening of its Studio City property later this year. The consensus view is still that added capacity will drive growth, although Deutsche Bank’s latest note even casts doubt on this theory. The opening of two new gaming venues this year isn’t expected to boost demand, and the market is underestimating pressure on casino operators’ profit margins, the German bank’s analysts noted this week. Melco’s adjusted property Ebitda was down 29 percent to $278.6 million. SJM’s annual gaming revenue dropped 8.8 percent to HK$79.3 billion, but CEO Ambrose So said it had been a challenging year, with a deterioration in the last half. So said that investors should not expect any sharp rebound in casino earnings in 2015, although is cautiously optimistic that revenue will stop falling in the second half of the year. ****** MPE
SkyCity Entertainment Group is optimistic about its prospects, but analyst reactions to its latest results have been lacklustre, while a major project designed to boost growth at home is facing difficulties. The company, which operates four casinos in New Zealand and two in Australia, is facing stagnant growth in its home market, while competition is set to mount in Australia. Overall in the 2013/2014 financial year New Zealanders spent $1.54 billion on the four main forms of gambling, an increase of less than one percent, while casino spending fell 2.1 percent. The company reported a flat profit of $66.6 million ($49 million) in its six monthly results on Wednesday, but also pointed to its increasing investment in Australia and its growing international business. SkyCity offered no full-year profit guidance, and its major capital investment project – an international convention centre in Auckland – is now in considerable doubt.