Macau casino operator Wynn Macau Ltd says it expects the group’s adjusted property earnings before interest, taxation, depreciation and amortisation (EBITDA) to be negative in the range of US$126.1 million to US$118.8 million for the two months ended May 31. That compares to positive adjusted EBITDA of US$215.2 million in the prior-year period, said the company in a Thursday filing.
The company gave the update as it announced a proposed offering of senior notes to professional investors. Based on preliminary financial information, Wynn Macau Ltd said it currently expected its total operating revenues to be between US$17.9 million and US$19.0 million in the April to May period, compared to US$759.7 million a year earlier.
According to Thursday’s filing, in the two months to May 31, Wynn Macau Ltd’s operations experienced an average daily adjusted property EBITDA loss of approximately US$2.0 million and an average monthly adjusted EBITDA loss of about US$61.2 million. That compares to EBITDA gain of US$3.5 million per day and US$107.6 million a month for the comparable 2019 periods.
Wynn Macau Ltd said its operating results continued to be impacted by the Covid-19 pandemic, which effects have “persisted into the second quarter of 2020.”
The company, controlled by U.S.-based casino operator Wynn Resorts Ltd, runs Wynn Macau on the city’s peninsula and Wynn Palace (pictured) in the Cotai district.
“We estimate table games win percentage negatively impacted adjusted property EBITDA by approximately US$24 million for the two months ended 31 May 2020 compared to a negative impact of US$12 million for the comparable 2019 period,” said the Macau unit.
In Thursday’s announcement, Wynn Macau Ltd said the aggregate principal amount, terms and conditions of the senior note offering were yet to be determined.
The company said it would use the net proceeds “for general corporate purposes until business recovers from the effects of the Covid-19 pandemic,” including to “facilitate the repayment of a portion of the amounts outstanding” under its existing credit facilities.
Premium recovery
In its latest filing, Wynn Macau Ltd said its board believed there would be “significant benefit” from the exercise as it would enable the enterprise to “extend the maturity profile of the group’s indebtedness and reduce the group’s secured indebtedness”.
As of May 31, Wynn Macau Ltd had unrestricted cash and cash equivalents of, respectively, US$1.71 billion and US$24.1 million in available borrowing capacity under the company’s revolving credit facility, according to the document.
Wynn Macau Ltd reported in May a nearly US$154.2-million net loss in the first quarter of 2020, compared to a US$190.6-million profit in the equivalent quarter a year earlier.
The casino group noted in Thursday’s statement that the Macau government had announced that April gross gaming revenue (GGR) had dipped 96.8 percent and Macau’s April visitor numbers from mainland China had fallen by 99.6 percent year-on-year. Macau casino GGR declined by 93.2 percent in May in year-on-year terms, according to official data.
Macau has not had a Covid-19 case since early April. All 45 confirmed patients have been released from hospital care, and the city recorded no death from the disease. Nonetheless travel in the region is still facing a number of restrictions, preventing visitors to return in meaningful numbers to Macau.
In Thursday’s filing, Wynn Macau Ltd said it believed the recovery in the Macau market would “be driven by the premium guest” once travel restrictions are eased. The company said it might benefit from the expected strength in that segment, as its two properties “cater to premium VIP and mass market guests.”
Macau market rivals Sands China Ltd and MGM China Holdings Ltd have also announced this month their respective plans to issue senior notes in order to boost liquidity amid the Covid-19 health alert.
