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Lam Ka-sing

Macau’s gambling revenue for the third-quarter revenue is expected to be negatively impacted after a series of typhoons battered the casino hub in recent weeks, but the setbacks are minimal as analysts factor in a rapid recovery.
On August 23, Typhoon Hato ripped through Macau with gale-force winds, leaving 10 casualties in its wake, along with severe damage to electricity and water supplies.
Hato was its first typhoon signal number 10 - the highest in Macau’s storm warning system - in 18 years and the strongest recorded in the city in 53 years.
A few days later, typhoon Pakhar lashed the former Portuguese colony, although damage was limited.
Cancellations by some tour groups and partial closures of some casino facilities prompted analysts to cut their third quarter outlook forecast for the casino industry.
CIMB estimated the average daily revenue during the storm week of 540 million to 655 million patacas (US$67 million to US$81.27 million), representing a drop of 15 to 30 per cent relative to the pre-typhoon period.
“Some junket players delayed their Macau trips to September,” Singapore-based CIMB Securities’ analysts Michael Ting and Jensen Poon said.
This, along with additional operating expenses and maintenance costs, was likely to mean lower margins in the third quarter this year, they said.
“Earnings before interest, tax, depreciation and amortisation (EBITDA) could be lower by 2 per cent assuming that the lost gross gaming revenue in the worst week would not be fully recovered by increased visitation in coming months,” Ting said. “Impact is one-off as visitation and gaming
revenues for the month were strong before the typhoon.”
Morgan Stanley estimated Macau’s gross gaming revenue would rebound in September, as operations appeared to be back to normal by the start of the month.
Casino earnings in the third quarter could even grow in low percentages compared to last year, Morgan Stanley equity analysts Praveen Choudhary and Alex Poon said.
“We visited Macau. While many tables were closed on the mass floor, the tables in operation were mostly occupied, and minimum bets were not lowered, suggesting strong demand,” Choudhary said.
“Most casinos resumed power and water supply immediately, border gates and ferries also resumed normal operation,” Choudhary added.
But official figures showed a stronger than expected result, with citywide gambling revenue for August at 22.68 billion patacas, up 20.4 per cent on year, according to the Gaming Inspection and Coordination Bureau.
For the first eight months of this year, Macau’s gross gambling revenue shot up 19.1 per cent on year to 172.02 billion patacas, reflecting a non-stop upward trend.
 Gordon Tsui, managing director of Hantec Pacific, said Macau’s gambling revenue growth in August was mainly driven by strong takings in the first three weeks of August.
“The typhoons’ damage happened at the end of August and is not fully reflected,” Tsui said. “Many tourists would avoid Macau for a while, affecting the third-quarter earning of casinos,” Tsui said.
However, Tsui believes the overall impact to casino operators would be minimal when viewed on a quarterly basis.
“Tourists would return to Macau particularly during the Golden Week in October,” Tsui said. “And many casinos have loyal customers who would have returned soon after the casinos reopened after the typhoon.”


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Macau’s casinos escape the worst of typhoon season

In this picture taken on August 24, 2017, damaged trees are seen in front of the Wynn casino resort in Macau, after Typhoon Hato hit the city. When Typhoon Hato swept into Macau it exposed a very different side to a city best-known for ostentatious casinos and wealthy high rollers. Images of residents desperately trying to cope with shoulder-high flood waters, torn up roads and smashed buildings gave a window into the lives of the ordinary citizens of Macau, a world away from chandeliered gambling halls. / AFP PHOTO / Anthony WALLACE / TO GO WITH Macau-China-economy-gambling-social-poverty, FOCUS by Elaine YU

Macau’s casinos are likely to report a dip in earnings for the third quarter following a week of bad storms in late August. Photo: AFP

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