Macau gaming sector EBITDA to recover to 82% of pre-pandemic levels in Q4

Brokerage firm CLSA predicts Macau casino operators will post an adjusted EBITDA of MOP15.9bn (US$1.97bn) for the fourth quarter of 2023.

Macau.- Analysts at CLSA have anticipated an 8 per cent quarter-on-quarter surge in adjusted EBITDA for the fourth quarter of 2023, reaching MOP15.9bn (US$1.97bn). This recovery indicates positive momentum in the industry, as it has reached 82 per cent of pre-pandemic levels.

According to CLSA’s analysis, the EBITDA margin of the sector is expected to remain stable at 24 per cent in comparison to the overall gross gaming revenue (GGR) before netting rebates, on a quarter-on-quarter basis. 

Jeffrey Kiang, Stella Liu, and Leo Pan, analysts at CLSA, have recognised key areas of focus for investors during the upcoming Chinese New Year (CNY) holiday period, including the potential for EBITDA margin growth, rebates, and operational granularity.

The researchers noted a resurgence in hotel bookings in Macau, with prices showing a significant year-on-year increase. Four weeks ahead of the CNY weekend (February 10-11), the average hotel prices have risen by 27 per cent. In fact, CLSA’s survey of 33 hotels revealed that 10 are already fully booked for the CNY weekend.

Despite adjustments in corporate expense forecasts and a slight reduction in sector EBITDA projections for 2023 and 2024 to US$6.1bn and US$8.4bn, respectively, CLSA maintains its 2024 GGR forecast at US$29.2bn. This represents a 30 per cent year-on-year growth, with mass GGR for 2024 expected to surpass the 2019 level by 18 per cent. 

Macau’s GGR for 2023 was MOP183.06bn (US$22.75bn). That’s a rise of 333.8 per cent when compared to 2022. 

Macau mass baccarat GGR surges 12.6% in Q4

The Gaming Inspection and Coordination Bureau reported that mass baccarat gaming revenue was MOP33.53bn (US$4.16bn) in the fourth quarter of 2023. That’s a rise of 12.6 per cent sequentially. 

According to authorities, this figure also represented approximately 109.2 per cent of the mass-market baccarat gross gaming revenue (GGR) in the same quarter of 2019, before the Covid-19 pandemic.

VIP baccarat experienced a 7.9 per cent quarter-on-quarter rise, contributing MOP12.70bn and accounting for around 39.3 per cent of the fourth-quarter 2019 levels. VIP baccarat held a 23.5 per cent market share of GGR in the final quarter of 2023.

Slot machine revenue was also up 4.1 per cent quarter-on-quarter to MOP2.97bn, with a market share of approximately 5.5 per cent. The mass-market segment, including slot machines, surpassed MOP41.41bn, constituting nearly 76.5 per cent of Macau’s casino GGR for the three months ending December 31.

Brokerage firm CLSA predicts Macau casino operators will post an adjusted EBITDA of MOP15.9bn (US$1.97bn) for the fourth quarter of 2023. Macau.- Analysts at CLSA have anticipated an 8 per…