Sands China Ltd emerged as a leader in Macau’s casino industry for the second quarter, leading in mass-market and VIP gross gaming revenue (GGR) as well as hold-adjusted earnings before interest, taxation, depreciation, and amortisation (EBITDA). This performance comes according to a detailed analysis by banking group JP Morgan, which followed the earnings season’s culmination with SJM Holdings Ltd’s interim results.
Market share insights:
JP Morgan’s review adjusted for reporting discrepancies between the Macau regulator and operators regarding the mass-market to VIP GGR split. They estimated that Sands China commanded a 24.5 percent share of the mass table GGR. However, a note from Deutsche Bank Securities Inc. portrayed Sands China as yielding market share to competitors, both year-on-year and sequentially, in the mass market segment.
In the VIP segment, JP Morgan pinpointed Sands China’s share at 21.2 percent within the six-concessionaire framework for the quarter ending June 30. Conversely, Deutsche Bank recognized Sands China as increasing its VIP share compared to the previous year and quarter.
Regarding hold-adjusted property EBITDA, JP Morgan attributed a 28.9 percent market share to Sands China for the April to June period. Yet, Deutsche Bank’s analysis suggested Sands China relinquished some EBITDA share to rivals year-on-year and from the previous quarter. Notably, Sands China reported an adjusted property EBITDA of $561 million for the quarter, marking a 3.7 percent increase year-on-year but an 8.0 percent decline sequentially.
Competitor and market dynamics:
Galaxy Entertainment Group Ltd ranked second across all three categories: mass table GGR at 18.9 percent, VIP table GGR at 21.0 percent, and hold-adjusted EBITDA at 20.9 percent. Macau’s Gaming Inspection and Coordination Bureau reported that the mass market segment generated just under MOP43.12 billion ($5.36 billion) in revenue, constituting 76.4 percent of the total GGR for the quarter. VIP baccarat accounted for a 23.6 percent share, with revenue slightly above MOP13.31 billion.
Industry-wide GGR and recovery:
According to GGRAsia, JP Morgan analysts Joe Greff, Samuel Nielsen, and Ryan Lambert highlighted that industry-wide GGR reached 78 percent of the levels seen in the second quarter of 2019, with a slight increase of 2 percentage points sequentially. They noted that the recovery rate for mass table GGR stood at 116 percent, up 1 point from the previous quarter. In contrast, VIP GGR remained at 23 percent of 2019’s figures, unchanged sequentially, while slot GGR was at 100 percent of 2019, down 1 point.
Deutsche Bank’s Carlo Santarelli reported that industry margins were at 28.2 percent for the quarter, slightly below the 29.3 percent observed in the second quarter of 2019, with net revenue down 14 percent from those 2019 levels.
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