Wynn Macau Ltd 1Q EBITDAR US$340mln on GGR share gains

May 08, 2024 Newsdesk Latest News, Macau, Top of the deck  

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Macau casino operator Wynn Macau Ltd reported first-quarter operating revenues of US$998.6 million, up 9.7 percent from the preceding quarter. Such revenue increased 66.4 percent from US$600.1 million in first-quarter 2023, according to a Tuesday filing to the Hong Kong Stock Exchange.

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 Ltd.

Wynn Macau Ltd recorded adjusted earnings before interest, taxation, depreciation, amortisation, and rent (EBITDAR) of just under US$339.6 million, 14.3-percent higher sequentially, and up 118.0 percent from the prior-year period.

“We generated US$340 million of EBITDAR in the quarter on gross gaming revenue [GGR] market share that was above both the prior quarter and above our 2019 exit rate,” said Craig Billings, group chief executive of Wynn Resorts, on a Tuesday conference call with investment analysts.

“We held above our expected range, so on a fully normalised basis, EBITDAR would have been approximately US$320 million,” stated the CEO. But he added: “The strength in our business has continued into the second quarter.”

JP Morgan Securities (Asia Pacific) Ltd said in a Wednesday note that Wynn Macau Ltd’s first-quarter property EBITDA “was comfortably above” market consensus, “thanks to solid mass-market share, at circa 13.5 percent versus 12.5 percent in recent quarters, and cost discipline … that allowed its margin to hit the highest level in about 10 years”.

“The solid momentum seemingly continues well into second quarter to date, with its mass volumes 30-percent above pre-Covid levels as per the [Wynn] management,” wrote analysts DS Kim, Selina Li, and Mufan Shi.

Wynn Macau Ltd’s first-quarter casino revenue rose 11.1 percent quarter-on-quarter, to US$820.1 million. It compared to casino revenue of just under US$447.1 million in the first quarter of 2023.

According to JP Morgan, Wynn Macau Ltd’ mass GGR, including slots, “grew 9 percent quarter-on-quarter, to be 23-percent above pre-Covid … reflecting continued strength in premium mass, and its VIP rolling volumes rose 21 percent quarter-on-quarter … from a low base.”

On a property basis, operating revenues from Wynn Palace rose by 11.9 percent on a sequential basis, to US$586.9 million. It compared with operating revenues of US$369.4 million a year earlier.

The property’s adjusted EBITDAR amounted to US$202.4 million, up 18.3 percent quarter-on-quarter, and an 82.2-percent increase from the prior-year period.

The Wynn Macau resort recorded operating revenues of US$346.4 million, up 96.4 percent from the prior-year period, but down 10.3 percent sequentially.

The complex produced adjusted EBITDAR of US$137.2 million, a 9.1-percent increase from the fourth quarter of 2023, and up 206.9 percent from a year ago.

Vitaly Umansky, analyst at Seaport Research Partners, said in a Wednesday memo that Wynn Macau Ltd “showed strong gains” in the first quarter of 2024.

“Player reinvestment dropped as a percentage of GGR – from 19 percent in fourth quarter to 18.8 percent in first quarter –, while VIP as percentage of GGR rose to 18.3 percent, from 17.1 percent in fourth quarter,” wrote the analyst.

“Wynn gained market share [in Macau] in the first quarter, rising 60 basis points quarter-on-quarter 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.

Wynn Resorts reported net income of US$144.2 million for the first quarter of 2024, up from US$12.3 million a year earlier. Operating revenues for the parent were US$1.86 billion in the three months to March 31, versus US$1.42 billion a year ago.

Wynn Resorts also declared a cash dividend of US$0.25 per share, payable on May 31.

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