Aggregated debt for Macau casino firms forecast to have hit $24 billion

Global brokerage and investments firm Morgan Stanley has reportedly announced that the combined debt of the six licensed casino operators in Macau is now believed to have reached $24 billion owing to the ongoing coronavirus-related downturn in their businesses.

According to a report from Inside Asian Gaming, the New York-headquartered financial services giant also forecast that third-quarter financial filings soon to start appearing should show the sextet holding an aggregated earnings before interest, tax, depreciation and amortization deficit for the three-month period of about $603 million. The source detailed that this latest bad news comes as a result of the lingering impacts of the coronavirus pandemic most notably including China’s ongoing adherence to a strict set of travel restrictions.

Enduring descent:

Morgan Stanley analysts Gareth Leung and Praveen Choudhary reportedly revealed that this underwhelming third-quarter tally should take the aggregated debt for the six Macau casino operators up to a minimum of $24 billion. The pair purportedly moreover disclosed that this sum is something like 380% worse than the around $5 billion in arrears the firms collectively held in the months immediately preceding the appearance of the coronavirus pandemic.

Problematic prognosis:

Macau is home to almost 40 casinos operated by MGM China Holdings Limited, Galaxy Entertainment Group Limited, Melco Resorts and Entertainment Limited and SJM Holdings Limited as well as the local Sands China Limited and Wynn Macau Limited subordinates of Las Vegas Sands Corporation and Wynn Resorts Limited respectively. This latest news from Morgan Stanley reportedly comes only a little less than five months after the same organization predicted that the six would likely finish 2022 holding aggregated arrears of roughly $25 billion.

Immediate inadequacy:

Morgan Stanley reportedly divulged that it expects Macau to record third-quarter aggregated gross gaming revenues of something like $680 million, which would represent a sequential dip of something like 35%, with mass-market receipts accounting for approximately 82% of this total. Such a finishing tally would purportedly furthermore equate to a drop of about 92% when compared with the $8.7 billion tally the sector chalked up for the same three-month period in pre-pandemic 2019.

Scarce sureness:

Nevertheless, the Morgan Stanley duo reportedly highlighted several optimistic developments including the recent revelation from Macau’s Chief Executive, Ho Iat Seng, that the enclave soon intends to reinstate package tours and local eVisa schemes following lengthy discussions with the central government of China.

Reportedly read a statement from Leung and Choudhary…

“October’s ‘Golden Week’ visitation was in line with the holiday period in May despite stricter coronavirus control measures while the period’s daily gross gaming revenues of $25 million was also similar to May, which is encouraging. October gross gaming revenues could be muted but we expect a gradual resumption of eVisa and package tour to start from November and this could drive fourth-quarter earnings before interest, tax, depreciation and amortization to 8% of 2019.”