With 1Q25 earnings season just around the corner, Citigroup analysts expect Macau’s concessionaires to report a combined 6% year-on-year decline in industry EBITDA for the quarter to around US$1.92 billion.
According to George Choi and Timothy Chau, the EBITDA decline will be driven by increase industry opex due to incremental costs associated with new supply launched – especially at Sands China’s The Londoner Macao – while some operators also seem to have suffered from less favorable hold.
That’s despite GGR remaining relatively flat year-on-year at MOP$57.7 billion (US$7.19 billion) and player reinvestment levels staying at “reasonable levels”.
Citi noted that the year-on-year EBITDA base was high as renovation work at Londoner was in the early stages and Bruno Mars staged a concert in Macau in 1Q24. Nevertheless, the bank forecasts industry EBITDA margin declining modestly to around 26% from 28% a year ago, with only Melco and MGM China showing year-on-year EBITDA improvements. Sands, as a result of its Londoner works, is seen suffering the largest EBITDA decline of around 13% year-on-year to US$530 million in 1Q25.
Nevertheless, Citi said it does not expect any significant market share movement for the quarter.
“Melco is likely the largest market-share gainer in the quarter – up 0.7ppts quarter-on-quarter to around 15.5% in 1Q25,” the analysts said.
“Sands’ market share likely fell 0.5ppts quarter-on-quarter to around 22.5% with some impact from unfavorable hold. The other four operators likely had market-share changes of less than 0.5ppts.”
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