For the first time in three years, Macau casinos could see a negative EBITDA (earnings before interest, taxes, depreciation and amortization) this quarter, as well as next quarter. This is the prediction of analysts with JP Morgan Securities (Asia Pacific) Ltd, the stockbroking division of JP Morgan. The analysts paint a dark picture, adding that there doesn’t appear to be any support for positive gains in the near term.

This past Monday, DS Kim and Sean Zhuang, the JP Morgan analysts, explained, “For the first time in three years, we forecast industry EBITDA to print negative growth both quarter-on-quarter and year-on-year in the first quarter to second quarter of 2019, driven not only by anaemic GGR [gross gaming revenue] momentum (expected), but also by relatively soft margins (lesser-known).”

They added that the gaming industry margins in Macau have deteriorated over the past nine months, in spite of the fact that the market had experiences “higher top-line” earnings and improved revenue.

The analysts predict that there won’t be any near-term positive gains in the GGR, asserting that the growth comparison of March and April was “very tough given unfavourable calendar year-on-year.” They added, “The impact of rising operating expense could be felt more acutely this year, where top-line growth will likely slow materially to flat to negative (versus +14 percent in 2018).”