GGRAsia – Wynn CEO to exit, Wynn Macau Ltd 3Q EBITDA down q-o-q

Wynn CEO to exit, Wynn Macau Ltd 3Q EBITDA down q-o-q

Nov 10, 2021 Newsdesk Latest News, Macau, Top of the deck

Wynn Resorts Ltd announced on Tuesday, the same day as its third-quarter results, that Matt Maddox will step down as group chief executive on January 31. He will be replaced by Craig Billings, chief executive of the group’s online betting unit Wynn Interactive, Ltd, and who also serves as president and chief financial officer of Wynn Resorts.

Mr Maddox (pictured in a file photo) will remain on the board of the Macau operating unit, Wynn Macau Ltd, until the end of 2022, to in his words, “assist with the concession renewal and help solidify our place as the premium operator in the region”.

In Tuesday’s results announcement, Wynn Macau Ltd widened its net loss judged quarter-on-quarter and also saw its quarterly loss on adjusted property earnings before interest, taxation, depreciation and amortisation (EBITDA) widen sequentially.

“The quarter was a sizable miss on recurring profits, although it probably doesn’t matter for the stock at this level and at this point,” said a Wednesday note from JP Morgan Securities (Asia Pacific) Ltd.

Judged year-on-year, the Macau unit’s third-quarter net loss narrowed to just under US$179.9 million versus US$280.7 million a year earlier.

But the latest quarterly loss widened by about 54 percent, from the US$116.6 million net loss in the second quarter.

Commenting on Wynn Macau Ltd’s performance, Mr Maddox said: “While there have been some fits and starts along the road to recovery in Macau, we are confident that Macau will benefit from the return of consumer demand as we progress through 2022.”

The Macau unit’s adjusted property EBITDA for the third-quarter were positive by nearly US$10.2 million, compared to a loss on such EBITDA amounting to US$112.1 million in the prior-year third quarter.

But quarterly adjusted EBITDA was down circa 85 percent sequentially from the US$67.6 million achieved in the second quarter.

Wynn Macau Ltd’s casino revenues – the firm operates Wynn Macau on Macau peninsula and Wynn Palace on Cotai – were up nearly 489 percent year-on-year for the three months to September 30, at US$232.3 million, from US$39.5 million in the prior-year quarter.

But judged sequentially, such revenues were down about 34 percent on the US$354.5 million achieved in the three months to June 30.

Total third-quarter operating revenues were just under US$312.0 million, versus US$67.1 million in the prior-year period.

Wynn Macau Ltd’s third-quarter operating costs and expenses widened to US$405.7 million from US$279.6 million in the prior year period. But the latest quarterly operating loss narrowed to US$93.7 million from US$212.6 million a year earlier.

The parent Wynn Resorts also reported its third-quarter results on Tuesday. The third-quarter net loss attributable to the firm – which also runs Wynn Las Vegas and Encore Boston Harbour in Massachusetts – narrowed to US$166.2 million from US$758.1 million a year earlier.

Maddox’s departure

The group said in a press release on Mr Maddox’s pending exit, that following a “unanimous request” by the board, Mr Maddox had agreed to remain on the Wynn Macau Ltd and Wynn Interactive boards through to the end of 2022.

Philip Satre, chairman of Wynn Resorts was cited as saying: “Matt has done an incredible job as CEO since his appointment four years ago.”

Mr Satre added of Mr Maddox, referring to the departure of the group’s founder Steve Wynn, in February 2018: “He very successfully led the company through what could have been one of the most disruptive business transitions in decades. He ensured a swift refreshment and remaking of the board of directors and senior management.”

Brokerage Sanford C. Bernstein Ltd said in a Wednesday note regarding Mr Billings eventually taking the helm as Wynn Resorts’ CEO: “We believe the company will continue to perform well under Craig’s leadership.”

The whole group’s total current and long-term debt outstanding at September 30, 2021 was US$11.74 billion, including US$5.77 billion of Macau-related debt. The group’s dividend programme remains suspended.

“Given the company’s liquidity position as of September 30, 2021, the company believes it is able to support continuing operations and respond to the current Covid-19 pandemic challenges,” said the parent.