GGRAsia – Wynn 2Q Macau EBITDAR likely at US$300mln : analysts

Wynn 2Q Macau EBITDAR likely at US$300mln : analysts

Jul 16, 2024 Newsdesk Latest News, Macau, Top of the deck

JP Morgan Securities LLC forecasts that the Macau operations of casino operator Wynn Resorts Ltd have produced property-level earnings before interest, taxation, depreciation, amortisation, and rent (EBITDAR) of about US$300 million in the second quarter of 2024.

That would represent a sequential decline of 11.7 percent on the US$339.6-million EBITDAR recorded in the first quarter by Wynn Macau Ltd.

The company operates the Wynn Palace resort (pictured) on Cotai, and also runs the Wynn Macau resort on the city’s peninsula. Wynn Macau Ltd is a unit of U.S.-based casino developer Wynn Resorts.

“For the second quarter of 2024, we are lowering our Macau property level EBITDAR estimate to US$300 million, down from our prior US$313 million, on lower margins,” wrote analysts Joseph Greff, Ryan Lambert, and Samuel Nielsen in a Monday memo.

The analysts however said their gross gaming revenue (GGR) forecast for Wynn Macau Ltd was “up modestly”, now assuming a circa 13-percent share of second-quarter Macau market-wide GGR of MOP56.43 billion (US$7.02 billion).

The institution expects Wynn Macau Ltd to report property-level net revenues of US$935 million for the three months to June 30.

The JP Morgan team said it maintained its “overweight” rating of Wynn Resorts, seeing “an undemanding valuation” for the company, “that takes into account a ho-hum second-quarter 2024 in Macau and macro risks, both domestically (consumer) and in China (geopolitical).”

Wynn Macau Ltd reported in May first-quarter operating revenues of US$998.6 million, up 9.7 percent from the preceding quarter.

Vitaly Umansky, analyst at Seaport Research Partners, observed at the time that Wynn Macau Ltd “showed strong gains” in the first quarter this year, with the firm’s market share in Macau rising to “17.1 percent”.

“While the increase was positive and better than expected, we do not expect a further material increase in market share by Wynn in the coming quarters,” added Mr Umansky in his note in May.