Macau casino operator Wynn Macau Ltd narrowed its first-quarter net loss to just under US$49.8 million, from a net loss of circa US$188.5 million in the prior-year quarter, led by improved adjusted earnings from its Wynn Palace resort (pictured) on Cotai.
The latest result, issued on Tuesday, was on first-quarter total operating revenues that doubled, to US$600.1 million, from US$298.4 million a year earlier.
The company also runs the Wynn Macau resort on the city’s peninsula. The group’s performance improvement coincided with the easing in early January of travel restrictions for Macau, mainland China and Hong Kong, the latter two being key consumer markets for Macau’s casino sector.
Wynn Macau Ltd’s first-quarter casino revenue rose 106.2 percent year-on-year, to US$447.1 million.
“After several challenging years, we were pleased to experience a meaningful return of visitation and demand, particularly in our mass gaming and retail businesses,” said Craig Billings, chief executive of the United States-based parent Wynn Resorts Ltd.
“We believe we are well-positioned for success in Macau’s next phase of growth,” he added.
Wynn Macau Ltd’s results were expressed on a consolidated basis, using International Financial Reporting Standards.
DS Kim and Mufan Shi, analysts at JP Morgan Securities (Asia Pacific) Ltd, said in a Wednesday note that, based on the first quarter, Wynn Macau Ltd “full profit recovery is clearly in sight”.
The parent Wynn Resorts announced on Tuesday the resumption of its quarterly dividend programme, with a cash dividend of US$0.25 per share, payable on June 6 to stockholders of record as of May 23. “The reinstatement of our dividend programme reflects the strength of our financial results, our robust liquidity position and our commitment to returning capital to shareholders”, stated the firm.
Mr Billings had said on Wynn Resorts’ third-quarter 2022 earnings call, in November, that the parent would only consider resuming a recurrent dividend payment once operations in Macau improved.
The parent runs Wynn Las Vegas in Nevada in the U.S., and Encore Boston Harbor in Massachusetts, and is working on a resort called Wynn Al Marjan Island in the United Arab Emirates.
Positive adjusted EBITDAR
The parent, which reports using U.S. Generally Accepted Accounting Principles (GAAP), had announced a first-quarter profit of US$12.3 million, versus a loss of US$183.3 million a year earlier.
Wynn Resorts Ltd also issued under GAAP, information on Wynn Macau Ltd’s adjusted earnings before interest, taxation, depreciation, amortisation and rent (adjusted EBITDAR). For the first quarter they were US$155.8 million.
For Wynn Palace, they amounted to just under US$111.1 million, compared to an adjusted EBITDAR loss of US$864,000 in the prior-year quarter. Wynn Macau produced positive adjusted EBITDAR of US$44.7 million, compared to negative adjusted EBITDAR of just under US$4.7 million a year earlier.
“Quarterly adjusted property EBITDA returned back to profit with… US$156 million, which was the highest level since fourth-quarter 2019 as Macau relaxed quarantine policies in January and group tours in February,” wrote Hong Kong-based analyst Andrew Lee of Jefferies Group LLC.
He added: “The result was negatively impacted by approximately US$10 million from lower VIP win-rate. Mass win-rate was also lower but not adjusted in earnings. The lower win-rate was due to low [levels of] visitors at the beginning of the quarter.”
Wynn Resorts Ltd said that the group’s total current and long-term debt outstanding as of March 31 was US$12.25 billion. It comprised US$6.75-billion of Macau-related debt; US$2.64-billion of Wynn Las Vegas debt; US$2.25-billion of Wynn Resorts Finance Ltd debt; and US$613.6-million of debt held by a retail joint venture, which the group consolidates in its balance sheet.
In March, Wynn Macau Ltd completed an offering of US$600.0-million in 4.5-percent convertible bonds due in 2029. The net proceeds are to be used for general corporate purposes.
