April expected to be seasonally soft: analysts

Macau’s April gross gaming revenue is expected to decline 11-12 percent year on year, with weakness leading into the Labor Day weekend, said Bernstein in a note on Monday.

Macau gross gaming revenue for April 18-24 was MOP4.2 billion (US$525.7 million), implying an ADR of MOP 600 million, compared to MOP 571 million in the previous week and MOP 580 million in March.

Assuming an ADR of MOP 525-475 million for the remainder of the month, April GGR would be MOP 16.9-17.2 billion, representing a year on year decline of 11-12 percent, said Bernstein analysts.

Wells Fargo analysts predicted a similar drop of 12-14 percent for the month in a note over the weekend, estimating the local gaming industry would generate between MOP540 million and MOP570 million for the rest of the month.

On a month on month comparison, Wells Fargo predicts April revenues would remain flat, or slightly up from March.

Sterne Agee CRT on the other hand, estimated GGR would decline 16 percent in April, due to current run rate trends.

“Our April estimate goes to -16 percent from -10 percent to -12percent as we anticipate continued slowness in the days ahead of the Labor Day Holiday, May 1.”

Earlier in the year, analysts foresaw 2016 as a year of stabilization in Macau, after revenue dropped to a five-year low in 2015.

However, the first half will continue to be volatile, according to Aaron Fischer, CLSA regional head of consumer & gaming research in a press conference in January,

2016 would be “a year of two halves”, with H1 still showing some volatility and difficult trading conditions, while H2 should begin to see some recovery with the opening of more new resorts, said Fischer.