Philippines GGR to reach 85% of pre-COVID levels by 4Q22: Morgan Stanley

In a note previewing financial results for the March quarter, Morgan Stanley analysts Gareth Leung and Praveen Choudhary said they expect Q1 GGR of Manila’s integrated resorts – City of Dreams Manila, Okada Manila, Resorts World Manila and Solaire Resort & Casino – to grow by 15% quarter-on-quarter to Php26.8 billion (US$511 million), driven by stronger local demand recovery in mass and slot revenue. This represents 68% of 2019 GGR levels.

But looking further ahead, they added that industry GGR “could reach 85% of pre-COVID levels by 4Q22, enabled by ASEAN travel reopening in 2Q22 and eased COVID control measures as of March 2022.
“Pent-up demand and election-induced consumption could provide upside to our estimates,” the analysts said.

By comparison, Morgan Stanley estimates that GGR from PAGCOR and other licenced casinos will reach only 40% of 2019 levels in Q1 at Php5.1 billion (US$97 million), improving to 71% of 2019 levels by Q4 at Php9.7 billion (US$185 million).

Industry-wide GGR would reach 82% of 2019 levels by Q4 at Php46.1 billion (US$878 million).

Noting that Okada Manila was the first of Manila’s IR operators to report its 1Q22 results last week, which saw its EBITDA fall 20% quarter-on-quarter, Morgan Stanley believes Okada will have lost market share for the quarter from 30% to 25%.

Conversely, it expects Solaire operator Bloomberry Resorts Corp to remain a market share leader with estimated EBITDA of Php2.3 billion (US$44 million). This would represent a 15% quarter-on-quarter improvement and push EBITDA up to 51% of 2019 levels.