Typhoon Mangkhut dampened otherwise strong Sept GGR

Macau GGR in September rose only 2.8 percent year-on-year – affected by casino closures during Typhoon Mangkhut and related disruptions.

According to data from the Gaming Inspection and Coordination Bureau (DICJ), Macau GGR reached MOP21.95 billion, up 2.8 percent. The amount recorded in September represents a 17.3 percent decrease from August 2018, which recorded GGR of MOP26.5 billion.

This brought accumulated GGR for the first nine months to the year to MOP 224.1 billion, up 15.9 percent year-on-year.

Analysts said the 33-hour-closure of casinos during Typhoon Mangkhut and the post-typhoon transport disruption and clean-up were to blame.

The results were below Bloomberg consensus of 7 percent, but mostly in-line with Bernstein, Deutsche Bank and Union Gaming analysts who revised their expectations following the typhoon.

Bernstein said the negative impact of the typhoon was partially offset by several new room opening/ expansions events from junkets in the last week of September.

However, if it wasn’t for the typhoon and closures, Union Gaming analysts said that GGR growth would likely have been quite close to initial expectations of 14 percent.

“Importantly, all of the operators we have spoken with have confirmed that they have not yet seen any changes in customer behavior (e.g. trip frequency, wallet size), nor are they seeing any material issues or concerns with their junket partners,” said the brokerage.

The results brought 18Q3 GGR up 10.2 percent year-on-year, the weakest quarterly growth since 16Q3. Bernstein analysts said it estimates VIP to be up 4 percent year-on-year in the quarter, while mass saw a more robust growth of 16 percent.

Looking ahead, Bernstein said it estimates growth of 4-6 percent year-on-year, while Deutsche Bank estimates growth of 5.1 percent year-on-year.

Union Gaming made a slightly higher estimate of 7 percent, adding there could be potential upside in the form of deferred Mangkhut trips.