JP Morgan Securities LLC has revised its estimate for the third-quarter property-level adjusted earnings before interest, taxation, depreciation, amortization, and rent (EBITDAR) for Las Vegas Sands Corp’s Macau operations, predicting a 4.3% decrease.
Revised Projections
JP Morgan Securities has adjusted its third-quarter 2023 property-level EBITDAR estimate for Las Vegas Sands’ Macau operations from US$628 million to US$601 million. The consensus estimate stands at US$629 million.
This revision is primarily attributed to the impact of Typhoon Saola, which disrupted Macau’s operations in September.
Typhoon Saola Impact
Typhoon Saola prompted Macau’s weather bureau to raise the storm signal to the highest level, Number 10, on September 2. This led to the temporary closure of the city’s gaming venues for approximately nine hours as a precautionary measure and caused disruptions in transportation.
As a result of the typhoon’s impact, analysts estimate that market-wide casino gross gaming revenue (GGR) in Macau reached MOP4.30 billion (US$530.0 million) in the first ten days of September.
Market-Wide GGR and Future Projections
JP Morgan Securities anticipates that market-wide GGR for September will be MOP14 billion, reflecting an 18% month-on-month decrease. For the third quarter of 2023, the projection is MOP48 billion, representing a 5% quarter-on-quarter increase.
The brokerage firm also adjusted its fourth-quarter 2023 Macau EBITDAR forecast to US$670 million, down from the previous estimate of US$727 million.
Longer-Term Outlook
Looking ahead to 2024, JP Morgan Securities projects property-level EBITDAR of US$2.9 billion for Las Vegas Sands’ Macau operations, down from the previous estimate of US$3.1 billion. This adjustment is based on a lower 2023 base and less aggressive margin assumptions.
The brokerage maintains unchanged estimates for Las Vegas Sands’ operations in Singapore, where it operates the Marina Bay Sands casino resort.
Despite the short-term impact of the typhoon, Las Vegas Sands continues to navigate Macau’s gaming landscape, with future earnings projections reflecting a cautious yet resilient outlook.