GGRAsia – Union Gaming dips Wynn group 2019 EBITDA on soft Macau

Union Gaming dips Wynn group 2019 EBITDA on soft Macau

Aug 29, 2019 Newsdesk Latest News, Macau, Top of the deck

Brokerage Union Gaming Securities LLC is reducing by 2.5 percent its estimates for adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) to be generated in 2019 by United States-based casino operator Wynn Resorts Ltd.

Analyst John DeCree said in a Wednesday memo that the revision accounted for factors including “lower growth in Macau”. Wynn Resorts is the parent of Macau casino licensee Wynn Macau Ltd.

Union Gaming forecast the parent’s 2019 adjusted EBITDA would be US$1.89 billion, compared to its prior estimate of US$1.94 billion.

“The outlook in Macau has become increasingly cloudy with ongoing VIP softness, social unrest in Hong Kong, economic implications for the U.S.-China trade war, [and] incremental competition from regional Asian gaming markets..,” wrote Mr DeCree.

Wynn Macau Ltd reported a 5.2-percent improvement in net profit for the second quarter, from US$160.3 million in the corresponding period last year to US$168.6 million for the three-months ended June 30.

But the most significant year-on-year change in the company’s second-quarter Macau operations was a decline in VIP gaming revenue at the older property downtown. VIP turnover at Wynn Macau for the three-months to June 30 fell from US$13.93 billion to US$9.28 billion in year-on-year terms – a 33.4-percent decline.

In its Wednesday memo, Union Gaming said it was currently forecasting – citing operator information and proprietary research – 2019 EBITDA at Wynn Macau and Encore (pictured), on the city’s peninsula, to be US$661.3 million, and that for Wynn Palace on Cotai, to be US$784.6 million.