GGRAsia – Wynn Macau Ltd 2Q profit US$61mln, rev up 28pct q-o-q

Wynn Macau Ltd 2Q profit US$61mln, rev up 28pct q-o-q

Aug 10, 2023 Newsdesk Latest News, Macau, Top of the deck, World

Macau casino operator Wynn Macau Ltd reported a net profit of US$61.0 million for the second quarter, versus a first-quarter net loss of just under US$49.8 million. The latest figure compared to a US$270.2-million loss in the prior-year period, during which the Macau market was still being impacted by restrictions linked to the Covid-19 pandemic.

The result for the three months to June 30, issued on Wednesday, was on quarterly total operating revenues of US$769.9 million, up 28.3 percent from the preceding quarter. Judged in year-on-year terms, such revenue increased 556.9 percent.

The firm operates the Wynn Palace resort on Cotai, and also runs the Wynn Macau resort (pictured) on the city’s peninsula.

The group’s performance continued to improve following the easing in early January of travel restrictions for Macau, mainland China and Hong Kong. The latter two places are key consumer markets for Macau’s casino sector.

Wynn Macau Ltd’s second-quarter casino revenue rose 36.0 percent quarter-on-quarter, to US$608.2 million. It compared to casino revenue of US$67.2 million in the second quarter of 2022.

Wynn Macau Ltd’s adjusted earnings before interest, taxation, depreciation, amortisation and rent (EBITDAR) rose 58.0 percent sequentially, to US$246.2 million. That compared with a negative figure of US$90.3 million a year ago.

For Wynn Palace, EBITDAR amounted to just above US$156.6 million, up 41.0 percent quarter-on-quarter, and compared to an adjusted EBITDAR loss of US$50.0 million in the prior-year quarter.

Wynn Macau produced positive adjusted EBITDAR of US$89.6 million, double from the first quarter this year, and compared to negative adjusted EBITDAR of US$40.4 million a year earlier.

“Wynn’s second quarter was encouraging, with a modest EBITDA beat (despite unfavourable mass holds), meaningful bump in margins, and further improving trends in July,” wrote analysts DS Kim and Mufan Shi, of JP Morgan Securities (Asia Pacific) Ltd, in a Thursday note.

The JP Morgan team noted that Wynn Macau Ltd’s quarterly EBITDA was on a “near-record margin”.

“Wynn generated US$246-million EBITDA, representing 72 percent of second-quarter 2019’s level,” stated the institution. According to the brokerage, the casino firm’s EBITDA margin rose 6 percentage points quarter-on-quarter, to 32 percent in the second quarter – versus 29 percent in second-quarter 2019 – which it said was “a positive surprise”.

Craig Billings, chief executive of the United States-based parent Wynn Resorts Ltd, said in prepared remarks: “Our second quarter results reflect continued strength in North America and Macau.”

“In Macau, the post-Covid recovery accelerated during the quarter, with particular strength in our mass gaming, luxury retail and hotel businesses,” stated the CEO.

He added: “In the U.S., Wynn Las Vegas and Encore Boston Harbor continue to perform well, generating a new second quarter record for adjusted property EBITDAR at our combined North American properties.”

Mr Billings also said the company was “excited” to begin construction on Wynn Al Marjan Island, a new project that the company is planning to develop in the United Arab Emirates.

On Wednesday, Wynn Resorts announced a second-quarter profit of US$105.2 million, up from US$12.3 million in the preceding quarter. The figure compared with a net loss of US$130.1 million in the prior-year period.

The parent company reported operating revenues of US$1.60 billion for the three months of 2023, up from US$1.2 billon in the first quarter this year. Such revenues were up from US$908.8 million for the second quarter of 2022.

Group-wide adjusted property EBITDAR was US$524.5 million for the second quarter of 2023, an increase from US$429.7 million in the preceding three months, and up from US$179.2 million a year earlier.

Wynn Resorts also announced that its board declared a cash dividend of US$0.25 per share, payable on August 31. The parent company announced earlier this year the resumption of its quarterly dividend programme.