Morgan Stanley has revised its earnings before interest, taxes, depreciation and amortization (EBITDA) forecast for the Macau gaming industry. According to the banking group’s analysts, the total figure for the six casino operators will reach nearly $6.55 billion (R627.57 billion) in 2023. This is 5% less than the $6.9 billion (RUB 661.1 billion) reported in the previous forecast.
Morgan Stanley attributes the lower EBITDA estimate to the somewhat slower recovery of Macau’s gambling market than previously expected. Analysts Pravin Choudhary, Gareth Leung, Stephen Grambling and Nicholas DeValeria note that Macau casino operators’ costs are rising along with business volumes.
According to Morgan Stanley estimates, the sector’s net revenue should reach about $24.05 billion (RUB 2.3 trillion). Net profit may reach the mark of $2.2 billion (210.8 billion rubles), which is 16% lower than the amount projected earlier.
Difference between previous and new EBITDA estimates for 2023 for specific operators amounted to:
Sands China Ltd – minus 4%.
Galaxy Entertainment Group Ltd – minus 12%.
Wynn Macau Ltd – minus 7%.
SJM Holdings Ltd – minus 24%.
Melco Resorts & Entertainment Ltd – plus 8%.
MGM China Holdings Ltd – plus 1%.
Morgan Stanley also estimated EBITDA of Macau gambling industry for 2024 at $9.48 billion (908.3 billion rubles). Analysts forecast total net profit to reach nearly $5.21 billion (499.2 billion rubles).
According to Morgan Stanley, mass-market revenues in Macau have already returned to pre-code levels. However, analysts believe the sector needs to increase the figure to offset higher taxes on entertainment and gaming venue rentals.
Analysts also reported that apparatus revenue in the third quarter of 2023 was 80% of the 2019 figure.
Notes: casinos in the UAE will give Wynn access to a wealthy population of 10 million.