Gaming | American-owned casino operators report first quarter losses
Monday 27th April 2020
Macau casino operators owned by U.S. parents are reporting first quarter losses caused by the onset of the coronavirus pandemic.
Macau gaming operator Sands China reported a net loss of $166 million for the first three months of 2020 after its revenue dropped 65.1% in year-on-year terms. According to a filing last week by its parent company, the U.S.-based Las Vegas Sands, net revenue contracted by two-thirds from $2.33 billion in the first quarter of 2019 to just $814 million in the first three months of this year.
Meanwhile, Las Vegas Sands reported a 51.1% decline in group-wide revenue during the first quarter to $1.78 billion. The company's operations in all three jurisdictions in which it operates - Macau, Singapore and the U.S. - were temporarily suspended during the quarter for varying periods of time.
Rival MGM Macau, which operates two properties in the SAR, reported that it expected an approximate $22 million in quarterly losses, compared to a profit of $192.8 million in the same quarter a year earlier.
In its preliminary financial results released late last week, its U.S.-based parent MGM Resorts International said that first quarter revenues had fallen 63% to $734.2 million.
Wynn Resorts, the third American casino operator with a Macau presence, is yet to release financial results for the first quarter.
However, in a company filing made earlier this month, Wynn Resorts said it expected total operating revenues to be between $912 million and $969 million for the first quarter, down from $1.64 billion a year earlier.
Wynn Resorts stressed that this is preliminary financial information that "could differ materially" from the actual results.
Then, in its 2019 annual report filed last week, the casino operator said the coronavirus was having an "adverse effect" on the group's business and that it was not certain that demand for gambling in Macau would recover quickly even after certain business conditions improve.
All three casino operators cited the impact of the coronavirus behind their diminished revenues during the first quarter.
Earlier this month, analysts at JP Morgan Securities (Asia Pacific) said that Macau casino operators have enough financial liquidity behind them to survive with "near-zero revenue" for years. According to the analysts, Sands China and Wynn Macau have enough in reserves to survive for about two years, while MGM can survive for "over a year" under the present circumstances.