# Macao Q2 EBITDA Hits On Huge Revenue Decline, Cost Rise

Banking group Morgan Stanley believes Macau's GGR could be "down 2% to 3% quarter-on-quarter" when final figures come out this month.


Macau's June GGR, in particular, is expected to be 11% lower than the previous month at MOP18 billion ($2.24 billion). May was a standout month, achieving its best monthly GGR since the COVID-19 pandemic began in early 2020.

"We are seeing shortcomings in the seller-side consensus Q2 EBITDA [earnings before interest, taxation, depreciation and amortization]," added analysts Praveen Chaudhary, Gareth Leung and Stephen Grambling.

The assessment is "based on lower volume sales and higher costs quarter-on-quarter," the memo added.

A June 10 report by brokerage CLSA Ltd found player rebates and other player reinvestments in the Macau casino market were growing faster quarter-on-quarter than the market-wide GGR.

Sales of public market baccarat rose 3.1% to MOP34.59 billion in the three months to March 31, accounting for about 60.3% of the market share, according to market segment data from the Game Inspection and Coordination Bureau, a city regulator.

In the first quarter, Macau's total revenue from the mass market segment, including slot machines, was only MOP $42.95 billion. These mass market revenues accounted for 74.9% of Macau's total casino revenue from January to March.

In its second-quarter evaluation released Friday, Morgan Stanley showed that Macau GGR's overall study was "down 1-2% quarter-over-quarter."

The agency noted: "Consensus expects second-quarter real estate EBITDA of $2.1 billion (+2% quarter-over-quarter, -2% on a hold-adjusted basis)."

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