SAR Concessionaires to Weather Any Storm Assures Bernstein

Brokerage firm Bernstein has remained fairly optimistic about the outlook Macau casino concessionaire have. The firm believes that the existing liquidity of the Special Administrative Region (SAR)’s companies will be sufficient to tide them over through any foreseeable future crisis, never mind any economic downturns or increased border scrutiny on the Chinese border which has reduced the flow of travelers already.

A Worst-Case Scenario Highly Unlikely
Regardless, Bernstein feels optimistic about the long-term prospects of these companies. In a recent update, the company’s analysts Vitaly Umansky, Louis Li, and Shirley Yang took a closer look at the six operating companies’ liquidity, using it as the base against which they ran their predictions for the future.

Analysts have cautioned though that SJM, which is yet to confirm its refinancing, only has three months’ worth of cash. The analysts have accounted for a worst possible case in which SJM gets no access to any revenue, with travelers completely cut out and no gamblers to spin the wheels of the gaming operations. The experts remain fairly upbeat about the short-term, though, but do caution what to expect:

Under a more reasonable zero-EBITDA environment, cash burn (including liquidity from credit facilities) increases to seven months for SJM, 17 months for Studio City and over 30 months for all others.

Bernstein
SJM has already objected that the estimates are not entirely accurate and that the company would be able to carry on for years without any revenue. The zero-revenue scenario paints a different picture, Bernstein argues, with SJM only having three months, Sands China doing much better with 12 months, and Wynn Macau going on for 14 months.

Source: https://www.gamblingnews.com/news/sar-concessionaires-to-weather-any-storm-assures-bernstein/