Macau aggregated casino operator debt forecast to top $25 billion this year

May 25, 2022 Macau Earnings & Filings Industry Updates

Global brokerage and investments firm Morgan Stanley has reportedly warned that the combined debt of the six licensed casino operators in Macau could exceed $25 billion by the end of the year owing to China’s ongoing strict travel restrictions.

According to a report from Inside Asian Gaming, the New York-headquartered financial services giant also used an official Monday note to advise investors that these aggregated liabilities may well top $27 billion by the conclusion of 2023. The source detailed that the pessimistic predictions followed an earlier revelation that net debts for casino firms in the former Portuguese enclave had already risen from around $5 billion in 2019 to stand at approximately $20 billion.

Serious supposition:

Morgan Stanley analysts Gareth Leung, Thomas Allen and Praveen Choudhary reportedly revealed that their latest forecasts assume that China maintains its rigorous coronavirus-related travel policies towards those travelling into Macau until the start of the new year as well as mass-market gaming revenues staying at the same levels as seen in March and April. The trio purportedly went on to disclose that this state-of-affairs could even get worse should Beijing decide to continue its current border rules into the second half of 2023.

Lingering lull:

Macau is home to over 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 Wynn Macau Limited and Sands China Limited subordinates of Wynn Resorts Limited and Las Vegas Sands Corporation respectively. The latest news from Morgan Stanley reportedly comes some eight months after the same organization slashed its aggregated 2022 earnings before interest, tax, depreciation and amortization forecast for these six firms by 29% to roughly $6.4 billion from revenues.

It expects to be 27% lower than previously envisioned at something nearer $12.5 billion.