Operator News
China – Macau delivers better than expected growth in November
By Phil - 3 December 2018
Following months of slower-than-expected growth, Macau’s casino revenue finally beat analysts’ predictions in November when GGR came in at 25bn patacas (US$3.1bn) up 8.5 per cent year-on-year.
The figure, confirmed by Macau’s Gaming Inspection & Coordination Bureau, surpassed the median analyst estimate for growth of four per cent.
November marked the 28th consecutive month of growth for the Macau gaming sector but also the third month in a row of just single-digit growth. September and October were actually the sector’s weakest months of growth in more than two years. The VIP sector increased by 10 per cent whilst mass market grew by seven per cent.
Deutsche Bank Securities described the result as a ‘pleasant upside surprise’ and poredicted December could be even better.
“Over the last six years, December win per day has been about 2.6 per cent better than the win per day in November,” it said. “Given the November result (US$104.3m win per day), this math would imply a win per day in December of about US$107m and a full-month result of about US$3.316bn, up 16.7 per cent year-on-year, and a two-year stack comparison of plus 33.7 per cent,’ it said.
Analysts at Sanford C. Bernstein believe that December GGR could see growth of eight per cent year-on-year.
“VIP in December 2017 was relatively weak, with low hold and soft volumes. Game play last year was impacted by more overseas business going overseas (i.e. Australia) as well as some slowdown due to issues at a large Guangdong underground bank.
They said that in November a high VIP hold rate in November helped boost the results. The expected growth rate was especially strong given that traffic to Macau casinos was held back a bit during the early part of by the month amid the Macau Grand Prix event.
Looking to December it said: “VIP in December 2017 was relatively weak, with low hold and soft volumes. Game play last year was impacted by more overseas business going overseas (i.e. Australia) as well as some slowdown due to issues at a large Guangdong underground bank.”
Union Gaming’s Grant Govertsen warned: “The December calendar is unfavourable, with one fewer Friday. Looking ahead to the first quarter of 2019, we expect a slow start to the year, with the whole of the first quarter of 2019 at plus three per cent, before picking up into the mid-single-digits post-first-quarter.” We remain comfortable with our mid-single-digit forecast in GGR next year (or roughly a GDP scenario), with mass outpacing VIP.”
