{"id":140911,"date":"2020-07-06T09:14:26","date_gmt":"2020-07-06T16:14:26","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=140911"},"modified":"2020-07-06T14:42:58","modified_gmt":"2020-07-06T21:42:58","slug":"macau-q2-numbers-could-be-worst-ever-says-morgan-stanley","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/macau-q2-numbers-could-be-worst-ever-says-morgan-stanley\/","title":{"rendered":"Macau Operators Staring at Worst Results Ever in Q2, Analysts Focus on Operating Costs"},"content":{"rendered":"

The second quarter of 2020 could be the worst three-month stretch on record for Macau’s six concessionaires. The special administrative region’s (SAR) gaming industry remains hindered by travel restrictions keeping gamblers away from the casino center.<\/p>\n

\"Macau
Morgan Stanley says Q2 could be the worst on record for Macau operators. (Image: Chris McGrath\/Getty Images)<\/figcaption><\/figure>\n

Morgan Stanley said losses for Macau operators in the April through June period could be the \u201cworst ever,\u201d topping the bleeding experienced during the global financial crisis. The comment refers to 2002 through today. In 2002, a four-decade monopoly controlled by the late Stanley Ho was broken, and Macau’s gaming industry was opened to foreign competitors.<\/p>\n

Morgan Stanley estimates that Las Vegas Sands (NYSE:LVS) — the largest Macau operator with five venues there — will post the largest unprofitable mark on the basis of loss before interest, taxation, depreciation and amortisation (LBITDA) at $286 million for the three months ending June 30.<\/p>\n

In terms of loss before interest, taxation, depreciation and amortisation (LBITDA) as a percentage of enterprise value (EV), Melco Resorts & Entertainment (NASDAQ:MLC) and MGM China at 1.7 percent seem the cheapest,\u201d said the bank.<\/p><\/blockquote>\n

Enterprise value is a company’s cash position, market capitalization and debt combined. Melco operates Altira Macau, City of Dreams<\/a> and Studio City, while MGM China, the China arm of MGM Resorts International (NYSE: MGM), runs MGM Cotai and MGM Macau.<\/p>\n

Managing Costs<\/h2>\n

The dismal second-quarter results from Macau operators aren’t surprising. The government there delivers gross gaming revenue (GGR) figures monthly and, as just one example, the June number plunged 97 percent<\/a>.<\/p>\n

\n

Likewise, some operators previously telegraphed struggles for the quarter. For example, Wynn Macau said in June that it lost about $2 million per day<\/a> in April and May at its eponymous integrated resort and Wynn Palace. With the bleak revenue and earnings forecasts in mind, analysts are turning their attention to how well operators are managing fixed costs.<\/p>\n<\/div>\n

Morgan Stanley said Sands contends with the highest daily operating expenses at an estimated $4.3 million, followed by rival Galaxy Entertainment at $2.9 million per day. However, those are the two most well-capitalized<\/a> Macau operators.<\/p>\n

The bank pegs Wynn’s daily costs at $2.6 million for the second quarter, while it forecasts Melco dealt with expenses of $2.2 million per day. MGM China and SJM Holdings looked good by comparison at $1.6 million and $1.3 million, respectively<\/strong>.<\/p>\n

Scary Aggregate Loss<\/h2>\n

In total, Morgan Stanley is forecasting a combined second-quarter loss of $1 billion for the six Macau operators, a stunning reversal from the year earlier period when the group earned $2.4 billion. For the April through June period, the bank estimates VIP revenue tumbled 97 percent, while mass market turnover declined 95 percent.<\/p>\n

With two abysmal quarters now in the books, Macau faces the specter of a 55 percent GGR decline this year, according to Morgan Stanley, and the bank acknowledges there’s downside risk to that forecast.<\/strong><\/p>\n

The brokerage firm sees turnover in the gaming mecca rebounding by 90 percent next year.<\/p>\n","protected":false},"excerpt":{"rendered":"

The second quarter of 2020 could be the worst three-month stretch on record for Macau’s six concessionaires. The special administrative region’s (SAR) gaming industry remains hindered by travel restrictions keeping gamblers away from the casino center. Morgan Stanley said losses for Macau operators in the April through June period could be the \u201cworst ever,\u201d topping […]<\/p>\n","protected":false},"author":46,"featured_media":140914,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[69069,62],"tags":[],"acf":[],"yoast_head":"\nMacau Q2 Numbers Could be Worst Ever, Says Morgan Stanley<\/title>\n<meta name=\"description\" content=\"Macau operators' second-quarter losses could be the worst ever in the gaming center's competitive history, according to Morgan Stanley.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.casino.org\/news\/macau-q2-numbers-could-be-worst-ever-says-morgan-stanley\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Macau Q2 Numbers Could be Worst Ever, Says Morgan Stanley\" \/>\n<meta property=\"og:description\" content=\"Macau operators' second-quarter losses could be the worst ever in the gaming center's competitive history, according to Morgan Stanley.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/macau-q2-numbers-could-be-worst-ever-says-morgan-stanley\/\" \/>\n<meta property=\"og:site_name\" content=\"Casino.org\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Casino.OrgNews\" \/>\n<meta property=\"article:published_time\" content=\"2020-07-06T16:14:26+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2020-07-06T21:42:58+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2020\/07\/macau.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"2482\" \/>\n\t<meta property=\"og:image:height\" content=\"1556\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Todd Shriber\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@etfgodfather\" \/>\n<meta name=\"twitter:site\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Todd Shriber\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.casino.org\/news\/macau-q2-numbers-could-be-worst-ever-says-morgan-stanley\/\",\"url\":\"https:\/\/www.casino.org\/news\/macau-q2-numbers-could-be-worst-ever-says-morgan-stanley\/\",\"name\":\"Macau Q2 Numbers Could be Worst Ever, Says Morgan Stanley\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/macau-q2-numbers-could-be-worst-ever-says-morgan-stanley\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/macau-q2-numbers-could-be-worst-ever-says-morgan-stanley\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2020\/07\/macau.jpg\",\"datePublished\":\"2020-07-06T16:14:26+00:00\",\"dateModified\":\"2020-07-06T21:42:58+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"Macau operators' second-quarter losses could be the worst ever in the gaming center's competitive history, according to Morgan Stanley.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/macau-q2-numbers-could-be-worst-ever-says-morgan-stanley\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/macau-q2-numbers-could-be-worst-ever-says-morgan-stanley\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/macau-q2-numbers-could-be-worst-ever-says-morgan-stanley\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2020\/07\/macau.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2020\/07\/macau.jpg\",\"width\":2482,\"height\":1556,\"caption\":\"Morgan Stanley says Q2 could be the worst on record for Macau operators. 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