The strength of the recovery for the Macau casino market has maintained momentum in the third quarter, said Craig Billings, group chief executive of Wynn Resorts Ltd, the parent of local operator Wynn Macau Ltd.
“Market-wide GGR [gross gaming revenue] momentum in Macau has been impressive, building through the second quarter,” stated Mr Billings (pictured in a file photo).
“The strength has continued into the third quarter, with mass drop per day in July exceeding what we experienced in each month in the second quarter, and reaching 120 percent of daily mass drop [seen] in 2019,” he added on the group’s Wednesday conference call to discuss the second-quarter earnings released the same day.
Mr Billings further noted: “In July, we also continued to experience robust hotel occupancy and very healthy tenant retail sales.”
The CEO also observed that the group – which runs the Wynn Macau resort on the city’s peninsula, and Wynn Palace on Cotai – was “deep into design and planning for our concession-related capital expenditure commitments, which we believe will help support Macau’s long-term diversification goals and be additive to our business over the coming years”.
All six Macau operators have been required by the Macau government – as a condition of their respective 10-year licences that started in January – to reinvest in the sector, mostly in the form of non-gaming projects.
Julie Cameron-Doe, Wynn Resorts’ chief financial officer, said on Wednesday’s call referring to the group’s own pledge to the Macau authorities: “For 2023 through 2024, we expect capital expenditure related to our concession commitments to range between US$300 million and US$400 million.”
Liquidity, UAE project
She also observed that group-wide, “our liquidity position remains very strong”.
The business had global cash and revolver availability of approximately US$4.7 billion as of June 30. This was comprised of US$1.8 billion of total cash and available liquidity in Macau, and US$2.9 billion in the United States.
In the latter market, the group runs Wynn Las Vegas in Las Vegas, Nevada, and Encore Boston Harbor in Massachusetts. Wynn Resorts also has a 40 percent equity interest in a casino resort being created with local partners in Ras Al Khaimah in the United Arab Emirates (UAE). Construction started in the first quarter.
Ms Cameron-Doe stated: “Importantly, the combination of strong performance in each of our markets globally, with our properties run rating approximately US$2.2 billion of annualised property EBITDAR [earnings before interest, taxation, depreciation and rent], together with our robust cash and liquidity, creates a very healthy leverage profile for the company globally.”
CEO Mr Billings added: “We’re well capitalised at the moment.”
Though he noted, referring first to a delayed process for downstate casino licensing in New York in the U.S.: “I expect we will maintain some extra liquidity until we really see how a few things play out. First is New York. The second is the macro economy and the third is the yield curve.”
He added: “We’re always looking at… the capital markets, and thinking about when to refinance and whether to do it dollar-for-dollar or modestly delever.
“We’ve reinitiated our dividend, and our leverage is well under control. So, we feel pretty good about where we are.”
The CEO also gave some commentary on Ras Al Khaimah, where the scheme has been given the title “Wynn Al Marjan Island”
He stated, referring to the issue of when Ras Al Khaimah might license gaming for the scheme: “I expect that we will have our licence for Ras Al Khaimah actually imminently. But there should be no concern that there is a legalisation process that needs to occur in order … for gaming to occur in that property.”
